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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

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To: David Culver who wrote (11587)	4/3/2011 1:46:29 PM
From: Alex	Read Replies (1) of 11633

Question for the thread. I haven been investing for several decades but have never held a REIT. Now retired I have been considering adding a few REIT's to my portfolio and have begun to do some DD. The following cut and paste from the link provided leaves me scratching my head as I am not an accountant................................... "The adjusted cost base calculation is required when a REIT unitholder decides to sell (or dispose) of all or portion of his or her units. The holder has to calculate and maintain a separate adjusted cost base for units of each particular REIT held. As most REITs do not track the individual adjusted cost base, each unitholder must keep account of his or her adjusted cost base. To eliminate the need to calculate the capital distributions from the date of acquisition, the unitholder should calculate annually the adjusted cost base of their unitholdings. The adjusted cost base of the units is averaged against all units held in a particular REIT. Also, if the adjusted cost base should become negative, the unitholder is deemed to have realized a capital gain equal to the absolute value of the negative amount. For example, if a unitholder's adjusted cost base of a particular holding of REIT units is $300 and the REIT distributes $1,000 to the unitholder, of which $600 is taxable income, the adjusted cost base will become negative $100 ($300 prior adjusted cost base - [$1,000 distribution - $600 other income]). The unitholder will immediately realize a capital gain of $100 and is required to report, at the year-end, a capital gain of $100. The adjusted cost base of the units would then be adjusted from negative $100 to zero." deloitte.com -------------------------------------------------------- Say what??????? This seems like a complicated yearly job. With dividends you simply get a statement yearly and apply the formula and move on. Is there really that much to the calculations or am I reading way too much into this. It might just simply be better for me to invest in First Capitol (FCR) which is a corporation which pays dividends but is actually a REIT. Thanks in advance, Alex

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