No. of Recommendations: 1
So you can see there are a lot of fine points here!

An even finer point is a lesser known fact that most REIT dividends are not 100% subject to ordinary income taxes. That is, for most REITs, a portion of the dividends are taxed at long term capital gains rates, and some may also be tax deferred (they're "return of capital", which adds to your original cost basis). So, for retirees in the lower tax brackets, some REIT dividends can be somewhat tax efficient.

Here's a post I made a while ago on the REIT board that gives some specific examples:
http://boards.fool.com/Message.asp?mid=16854602

(Note that this isn't a recommendation to purchase any of the REITs listed. Purchasing individual REITs requires examining many different variables, just as with purchasing any other common stock.)

Ken
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