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Level 1

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

 
5 Replies
Level 20

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

All  IRAs are tax shelters and nothing investment related that happens inside  IRAs effects the outside world except  when you take distributions.  

Level 12

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

However, the IRA sometimes needs to file Form 990-T.
Level 1

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

Critter#2. Thanks for your input.  I am interested in how income and distributions from a REIT are handled in each vehicle both while held and when distributed (taken out), a ROTH vs. a Traditional. For instance in the Traditional all distributions are handled as ordinary income when withdrawn vs. being taxed as non-qualified vs. qualified dividends, in a "taxable" account.  More my concern is whether there is a rule similar to an MLP, special handling for annual unrelated business-tax income in excess of $1000, or UBTI. Do you have any insight regarding whether UBTI can occur in a REIT?  I have been down this road with MLPs and they can become a tax PIA. Thanks
Level 20

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

All distributions from an IRS are treated as ordinary income no matter what investments you had and how the earnings happened.  

Could the REIT have UBTI ... possible ... contact the REIT managers to find out if yours will have these earnings.
Level 1

How are REIT distributions taxed in a ROTH IRA? In a Traditional IRA?

Thank You. I'll call them.