Real estate investment trusts, or REITs, have long been popular with investors when it comes to finding income.
That popularity only became stronger during the recent prolonged period of low interest rates. The reason is easy to understand. Thanks to their tax structure, REITs are required to pay out the majority of their cash flows back to investors. Therefore, they pay out much higher dividends than the average stock.
However, it’s that tax structure that could get you a call from Uncle Sam.
Holding REITs in the wrong accounts can come back to bite you in the form of a high tax bill and potentially negate much of their higher yields. The trick to getting the most from your REIT dividends is holding them in the right place to keep Uncle Sam at bay.
Check out our dedicated page for REITs to find the REITs that pay the highest distributions.