I keep reading all these articles about how dividend investors are going to get wacked come 2013 however it would seem to me that a large percentage of these mREIT shares are held in IRAs and by pension funds. I do believe that both of these tax differed investment vehicles get taxed as income when withdrawals are made and thus the dividend issue is of little concern for those investors. So I’m only concerned about those people who are investing in mREITs in taxable accounts who may lose interest in 2013 because they are no longer getting the reduced 15% tax. What I don’t know is how large of percentage this is.
After all, when they have these SPOs who are buying these shares? It’s not retail. It’s not ETFs. I doubt it is mutual funds as they have to rebalance daily. That leaves hedge funds and pensions and it is my guess that dividend investing isn’t exciting enough for a hedge fund but then maybe I am wrong.
There was an article on Yahoo today where the headline made it sound like mREITs might take a dividend hit, but in the 3rd or 4th paragraph it mentioned that they are already taxed as ordinary income. The article did mention that Obamacare adds another 3.8% (IIRC) for high dividend income. I forget what the threshold is but it's pretty high. If you are making that much on divvies you probably won't starve.
I only own them in my IRA accounts so I didn't know that as it has never come up.
So what that says is that the 2013 dividend rate change is a non event for mREITs. It makes you wonder why these tax articles are showing up in the news sections of the yahoo web pages for mREIT stocks since it is of no consequence.