Tax advantages

Tax advantages

Non-traded REITs and listed REITs offer potential tax-advantaged income for investors.

REIT distributions are tax-advantaged

  • REITs can deduct depreciation which reduces taxable income but has no effect on cash flow.
  • REITs have the ability to characterize a portion of the distribution received as return of capital (ROC).1
  • ROC distributions are tax deferred until redemption, at which time they are characterized as capital gains.
  • Additionally, REIT distributions receive a 20% deduction on ordinary income, reducing the tax rate on ordinary income distributions from 37% to 29.6%.2
Real estate may offer high levels of income, a portion of which may be tax-advantaged
Average 10-year distribution rate3
Average 10-year distribution rate
At December 31, 2022. Source: Bloomberg, Cohen & Steers. Data quoted represents past performance, which is no guarantee of future results.