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Real estate investment trusts (REITs) often pay high dividend yields and offer diversification from typical stocks.
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In fact, one study of investment portfolios from 2000-2020 by the Teachers Insurance and Annuity Association of America found that REITs helped improve risk-adjusted returns.
But do REITs also come with tax benefits? Keep the following in mind before investing.
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No Corporate Taxes
As a general rule, REITs don’t pay separate corporate income taxes. That helps prevent returns from being diluted by taxes.
To qualify for this exemption, they must pass along at least 90% of their profits to investors…
