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IRS taxes most high-yield REIT dividends as ordinary income, costing investors thousands unless held in tax-advantaged accounts.

Market News
05 Nov 2026, 16:32 WIB
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IRS taxes most high-yield REIT dividends as ordinary income, costing investors thousands unless held in tax-advantaged accounts.

Five high-yield REITs offer dividends up to 15.85%, but the IRS taxes most of these payouts as ordinary income, which can significantly reduce net returns for investors holding them in taxable accounts. For example, a $500,000 investment in these REITs could lose over $9,300 annually to taxes at a 24% bracket, compared to zero tax in a Roth IRA. Over 10-20 years, these tax costs compound, potentially costing investors hundreds of thousands in lost income. Holding REITs in Roth IRAs or using phased Roth conversions can help avoid these taxes, making account type a crucial factor in maximizing income from REIT dividends.

Realty Income Corp (O) offers a 5.5% dividend yield and trades at USD 59.98 on Pluang, up 1.28% as of Nov 05, 2026 21:41 WIB. The article highlights tax impacts on high-yield REIT dividends, while on Pluang, O shows a typical hold time of 129 days and a buy order activity of 63%. Omega Healthcare Investors (OHI) also yields 5.53%, trading at USD 48.85 with a 0.74% gain, reflecting active investor interest in these real estate stocks.

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