A Real Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate — office buildings, shopping centers, apartments, data centers, cell towers. REITs trade like stocks but are legally required to distribute 90% of taxable income as dividends, generating high dividend yields (3-7%). They provide real estate exposure without buying physical property. REIT dividends are typically taxed as ordinary income (not qualified dividends). Major REIT ETFs: VNQ (Vanguard), REIT (Schwab). Within tax-advantaged accounts, REITs are particularly tax-efficient; in taxable accounts, their high ordinary-income distributions can be a drag.
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REIT
August 22, 2026 · Aditya Gupta
Investing
Related terms
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A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
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