In a recent Forbes article, contributor Brad Thomas explained the importance of President Eisenhower and his influence on paving the way for real estate investor trust investors to enjoy relative high dividend payout ratios.
This REITs feature is a result of combined effects of tax efficeny and the 90% of taxable icome payout requirement to retain the tax status.
However, there is the looming cloud hanging over REIT investors in regards to the pending expiration of the Bush Tax Cuts at the end of this year.
If demand for tax preferred qualifying dividends were to shift partly over to REITs as this tax advantage is removed, that increased demand should be a tail wind for REIT share values.
Said more simply, when the Bush Tax Cuts expire, REITs will not be affected and that will make the well-positioned asset sector even more attractive, compared to the C-Corporations.
To read the article in its entirety click here.