Hi! Thanks for the question.
I will try to answer your question point by point plus provide
additional information for some of your questions.
1. What is a Real Estate Investment Trust?
“A corporation or trust that uses the pooled capital of many investors
to purchase and manage income property (equity REIT) and/or mortgage
loans (mortgage REIT). REITs are traded on major exchanges just like
stocks. They are also granted special tax considerations.”
“Real Estate Investment Trust”
http://www.investorwords.com/cgi-bin/getword.cgi?4060
Our next two links provide a history of REITs and the types of REITs.
History of REIT
http://www.reitnet.com/reits101/history.phtml
Types of REITs
http://www.reitnet.com/reits101/types.phtml
2. How is it structured?
An REIT is very similar to a corporation. In our next link we have an
enumeration of the components of an REIT.
“What are the requirements for operating as a REIT?”
http://www.reitnet.com/qa/
3. How does it work?
“REITs allow participants to invest in a professionally-managed
portfolio of real estate properties. REITs qualify as pass-through
entities, companies who are able distribute the majority of income
cash flows to investors without taxation at the corporate level
(providing that certain conditions are met).”
“What is a REIT?”
http://www.reitnet.com/reits101/definition.phtml
“REITs are owned by thousands of individuals, as well as large
institutional investors including pension funds, endowment funds,
insurance companies, bank trust departments and mutual funds.”
“The majority of REIT shares can be purchased on the major stock
exchanges, and orders can be placed through stockbrokers.”
“Investing in REITs”
http://www.reitnet.com/reits101/investing.phtml
4. What are the tax implications?
“REIT distributions are generally broken down into two major
categories, earnings and returns of capital. Distributions based on
earnings are generally taxable as ordinary income.”
A more thorough explanation of the tax implications is available from
the following link.
“How do REIT distributions impact an individual’s basis for income tax
reporting purposes?”
http://www.reitnet.com/qa/answer.phtml?number=8
Other tax questions about REIT could be answered in this link.
http://www.reitnet.com/qa/search.phtml
You can know more about the basics and advanced concepts of REITs from
the REITNet website which provides lots of information as regards to
this type of investment.
REITNet
http://www.reitnet.com/
Search terms used:
"Real Estate Investment Trust" glossary
I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
Thanks for visiting us.
Regards,
Easterangel-ga
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