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To: Elroy who wrote (109071)	7/10/2012 12:20:36 PM
From: KyrosL	Read Replies (3) \| Respond to of 118717

No, REIT dividends do not qualify. REITs are not corporations, although they must follow corporation rules in their accounting. They are unit trusts, whose profits (or, more accurately cash flow) are not taxed at the trust level but at the stockholder level, as long as they distribute 90% of their profits to their stockholders. PS For the adventurous, CIM is an MREIT I recently bought, that I think is a good value. It's in the process of changing accountants (usually a red flag) and has delayed its SEC fillings. As a result it trades at a double digit percent discount to its NAV (which is around $2.75). If, as I expect, the eventual NAV, blessed by the new accountants, turns out to be not much different, it will quickly trade up to it.

To: Elroy who wrote (109071)

7/10/2012 12:22:33 PM

From: B.K.Myers

Respond to of 118717

I don't want to tie up Dale's thread with this discussion, but here is the AGNC Investor Relations statement about their dividends.

Dividends

Corporate Structure We intend to qualify as a real estate investment trust ("REIT"), for federal income tax purposes and will elect to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. We generally will not be subject to U.S. federal or state corporate taxes on our taxable income to the extent that we annually distribute at least 90% of our annual taxable Net income to stockholders and maintain our intended qualification as a REIT.

Distributions to stockholders will generally be taxable as ordinary income. However, a portion of such distributions may be designated by us as long-term capital gain to the extent that such portion is attributable to our sale of capital assets held for more than one year. If we pay distributions in excess of our current and accumulated earnings and profits, such distributions will be treated as a tax-free return of capital to the extent of each stockholder's tax basis in our common stock and as capital gain thereafter. Stockholders will be notified of the proper tax characterization of AGNCs dividends by way of IRS Form 1099-DIV following the close of each tax year.

Due to the complex nature of the applicable tax rules, it is recommended that stockholders consult their tax advisors to ensure proper tax treatment of dividends received.

ir.agnc.com

My last post of this Off Topic subject matter.

B.K.