Investopedia

Captive Real Estate Investment Trust

Dictionary Says

Definition of 'Captive Real Estate Investment Trust'

A real estate investment trust (REIT) that is controlled by a single company or investor and set up to own the real estate assets of the parent company for tax purposes. This tax mitigation strategy is generally used by large retailers and banks that have many storefronts or branches in numerous locations. There are two types of captive REITs: rental REITs, which are typically used by multi-state retailers, and mortgage REITs, which are used by large banks.
Investopedia Says

Investopedia explains 'Captive Real Estate Investment Trust'

Captive REITs are an attempt to capitalize on the favorable tax treatment given to REITs. Rent for individual stores or branches is paid to the captive REIT by the parent company, which deducts them as a business expense, thereby reducing its taxable income. Another potential tax benefit for the parent company is through the dividends paid deduction (DPD) on dividends received from the captive REIT.

Articles Of Interest

  1. The Basics Of REIT Taxation

    The unique tax advantages offered by these investments can translate into superior yields.
  2. How To Analyze Real Estate Investment Trusts

    REITs are much like dividend-paying companies, but analyzing them requires consideration of the accounting treatment of property.
  3. 5 Types Of REITs And How To Invest In Them

    Real estate investment trusts are a sound addition to a diversified portfolio. Learn what you need to know to invest.
  4. The REIT Way

    Ever considered investing in real estate? Read about the REIT and see if it's the investment for you.
  5. The Impact Of Interest Rates On Real Estate Investment Trusts

    REITs are high-yield investments, but do they have an inverse relationship with interest rates? Find out here.
  6. Depreciation: Straight-Line Vs. Double-Declining Methods

    Appreciate the different methods used to describe how book value is "used up".
  7. 7 Unconventional Ways Businesses Can Borrow Money

    Find out how your business can get the money it needs - even when the bank says "no".
  8. Investing In REITs Instead Of Property

    Learn why this one particular REIT is a better investment than holding physical property in your retirement portfolio.
  9. Financial Statement: Extraordinary Vs. Nonrecurring Items

    When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ...
  10. GE's Guidance Wasn't Great, But Expectations Seem Low

    GE looks underpriced on its long-term growth potential.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center