Reits are showing great yields and cap gains in this slow recovery with extended low mortgage rates. But what are the pluses and pitfalls in this environment? For example I hear there is some complex rule about holding too much REIT in an IRA can trigger a large tax which you wouldn't get if held in non-ira.
I had just doubled up on REITS, then got about a 20% crash on the new one in a
couple days. I had heard a newsblurb that the US is going to lower some rather
high taxes (some 1980 rule) on foreign investors on US reits. I suppose this is
to reflate our market.
But now I see claims that Japan has been pursuing a dangerous scheme with
bundled US reits with almost ponzi properties. They hold large percentages of US
reits and have been paying their own investors huge dividends for UNREALIZED
capital gains, this out of the inflows of their new investors. So I guess the
prospect of this scheme blowing up and causing Japan to dump reits has jostled
- posted 6 years ago