Not sure I'm correctly understanding the conversation between FR- the specifics regarding the taxability of its payouts vs. the general taxability of REIT dividends. I don't know anything about FR regarding an "additonal" payout which is a return of capital. My experience in holding a bunch of other REITs is that the quarterly paid out dividend is what you get, there's no additional amount given out as a non-taxable, return of capital. In other words, the dividends declared and paid include both the taxable and non-taxable portion (if there is a non-taxable amount). Sometime before April 15, a letter goes out to the stockholder from the REIT which indicates, for each of the year's prior quarterly dividends, what percentage is to be considered taxable and what percentage non-taxable.
What I am trying to say is that if someone invests in REITs and thinks they are going to get more cash back than what is stated by the dividend, that is not correct-- at least in my experience. There's no "extra". But some of that cash you get is usually (depending on the specific REIT) not taxable.
My understanding is that the full dividend (tax. plus non tax.)is declared on Schedule B with the non-tax, return of capital portion then deducted on the appropriate Sched. B line. Also, because it is a return of capital, this non tax. amt. must be deducted from one's cost basis when one sells the stock. Of course, I am giving my totally unqualified opinion here. I defer to you CPA experts regarding tax matters.
Once again, I'll recommend Richard Barron and his SI REIT thread as a very good source of knowledge, information, and support. Here's a REIT book that was recently mentioned there:
techstocks.com
Paul |
