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Alternative Investments – REIT’s

What is a REIT?

A real estate investment trust, or REIT, is a company that owns, and in most cases, operates income-producing real estate. Some REITs also engage in financing real estate. The shares of many REITs are traded on major stock exchanges.

To qualify as a REIT, a company must have most of its assets and income tied to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends. A company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate taxable income. As a result, most REITs historically remit at least 100 percent of their taxable income to their shareholders and therefore owe no corporate tax. Taxes are paid by shareholders on the dividends received and any capital gains.

REITs are subject to various risks such as illiquidity and property devaluation based on adverse economic and real estate market conditions and may not be suitable for all investors. REITs are sold by prospectus only to qualified investors who meet minimum suitability requirements, as well as suitability standards as determined by the financial advisor. Consider the investment objectives, risks, and charges and expenses carefully before investing.

Call Shelly Dodge at 972/539-0002 today to schedule a complimentary consultation to review your financial goals and discuss the various options for Alternative Investment Strategies.

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