I just "stumbled" onto this stock and I'm very interested in the monthly dividend. My question is - Is the a REIT where the dividend does NOT qualify for the 15% max tax on dividends? Thanks in advance.
Nope. The grubbermitt doesn't WANT you to buy the safer REIT's. They want you to prop up the spec market so they look good. Ptooey on the tax treatment so far on O. It's appreciation has more than offset the tax on the dividend. Can it continue? I think so, but more modestly.
REIT dividends are NOT qualified. You pay tax as ordinary income. A portion of distributions is often classifed as return of capital, recapture of depreciation, and several other categories. Look at old news postings in late January and early Feb on the web for classification for last year. Most companies don't change much from year to year.
Also remember 1099's for REITs are often incorrect on the 31 Jan broker statements. Final 1099s are not issued till March 1st!
Most REITS pass through their earnings without being taxed at the corporate level, therefore they do not qualify for the 15% max rate. However their is more to be considered. Last year 15 cents of Realty Income dividend was a return of capital, and not taxed as income. This ROC lowers your tax basis and is taxed as a capital gain when the shaes are sold. Other REITS have other distribution oddities. The link lists the dividends for all REITS for tax year 1993. Its not a simple question you asked