REIT (Real Estate Investment Trust)

To qualify as a REIT under the Internal Revenue Code, the company must distribute at least 90% of its taxable income to shareholders as dividends. In exchange, the REIT itself avoids federal corporate tax. Listed examples include American Tower (AMT, cell towers), Prologis (PLD, logistics warehouses), and Vanguard’s VNQ ETF for broad exposure. REIT dividends are usually taxed as ordinary income, not at the lower qualified-dividend rate, so they are often best held in a Roth IRA or 401(k).