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Real estate income has outpaced bond income. Learn how REIT income stacks up against other asset classes.
Income generated by publicly traded real estate investment trusts (Public REITs) and private real estate has outpaced equities, taxable corporate bonds, and municipal bonds over the last 10 years17. Real estate has the potential to provide a steady source of income based on the rent paid by tenants’ which can be used to pay distributions to investors. For investors seeking income, real estate may be an option to consider, especially after-tax benefits are factored in.
AVERAGE DIVIDEND/DISTRIBUTION INCOME RATES OVER 10 YEARS1
The Tax Cuts and Jobs Act signed into law in December 2017 created a 20% deduction for REIT dividend income available to non-corporate taxpayers, regardless of itemization or adjusted gross income. The tax treatment of the income produced by different asset classes is shown below.
TAX EQUIVALENT YIELD TABLE4— HOW RETURN OF CAPITAL CAN AFFECT REIT YIELDS
(Hypothetical based on 10-year average dividend/distribution income rates)
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