Comments on: Increasing Dividend Yield Part II: REITs * http://dividendsvalue.com/5917/increasing-dividend-yield-part-ii-reits/ Dividend Investing & Value Investing For A Superior Portfolio Mon, 11 Apr 2011 13:45:49 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: D4L http://dividendsvalue.com/5917/increasing-dividend-yield-part-ii-reits/comment-page-1/#comment-26268 D4L Tue, 06 Apr 2010 12:22:15 +0000 http://dividendsvalue.com/?p=5917#comment-26268 Gaurav: I am not a tax expert, but it is my understanding there could be issues holding tax advantaged securities (such as a REIT) in an IRA. Best Wishes, D4L Gaurav: I am not a tax expert, but it is my understanding there could be issues holding tax advantaged securities (such as a REIT) in an IRA.

Best Wishes,
D4L

]]> By: Gaurav http://dividendsvalue.com/5917/increasing-dividend-yield-part-ii-reits/comment-page-1/#comment-26229 Gaurav Mon, 05 Apr 2010 23:02:19 +0000 http://dividendsvalue.com/?p=5917#comment-26229 Newbie here -- would it help to hold REIT in a Traditional (or rather a Rollover) IRA as well? I have a high income (tax bracket of 33%) and do not have a Roth IRA account. I have two options: taxable account or Rollover IRA account (from my previous 401(k)). Where should I hold? I believe Rollover IRA. Correct? Thanks. Newbie here — would it help to hold REIT in a Traditional (or rather a Rollover) IRA as well? I have a high income (tax bracket of 33%) and do not have a Roth IRA account. I have two options: taxable account or Rollover IRA account (from my previous 401(k)). Where should I hold? I believe Rollover IRA. Correct? Thanks.

]]> By: Carnival of Personal Finance #148 http://dividendsvalue.com/5917/increasing-dividend-yield-part-ii-reits/comment-page-1/#comment-24529 Carnival of Personal Finance #148 Mon, 15 Mar 2010 08:02:40 +0000 http://dividendsvalue.com/?p=5917#comment-24529 [...] D4L from Dividends Value presents Increasing Dividend Yield Part II: REITs. [...] [...] D4L from Dividends Value presents Increasing Dividend Yield Part II: REITs. [...]

]]> By: dizzy7 http://dividendsvalue.com/5917/increasing-dividend-yield-part-ii-reits/comment-page-1/#comment-24182 dizzy7 Wed, 10 Mar 2010 16:22:19 +0000 http://dividendsvalue.com/?p=5917#comment-24182 Another tax factor to keep in mind about REIT's is that a portion of their dividends are considered return of capital and are tax deferred until such time as you sell the stock, when you must deduct the return of capital amounts from your cost basis. Because the return of capital part of a REIT's dividends is often substantial, that effectively means that a large part of your dividends are tax free until when/if you sell the stock. Hold the stock for over a year and presto(!) the return of capital dividends become long term capital gains as far as taxes are concerned. That's no advantage now, but could be in the future if we go back to a tax system in which capital gains are taxed at a lower rate than dividends. Another tax factor to keep in mind about REIT’s is that a portion of their dividends are considered return of capital and are tax deferred until such time as you sell the stock, when you must deduct the return of capital amounts from your cost basis. Because the return of capital part of a REIT’s dividends is often substantial, that effectively means that a large part of your dividends are tax free until when/if you sell the stock.

Hold the stock for over a year and presto(!) the return of capital dividends become long term capital gains as far as taxes are concerned. That’s no advantage now, but could be in the future if we go back to a tax system in which capital gains are taxed at a lower rate than dividends.

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