Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.
Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.
In Idaho, as in other states, Real Estate Investment Trusts (REITs) are governed by federal tax law, specifically by the Internal Revenue Code (IRC). REITs must comply with certain IRS requirements to qualify as a REIT, such as investing at least 75% of total assets in real estate and deriving at least 75% of gross income from rents or mortgage interest. Idaho does not have specific statutes that uniquely regulate REITs; instead, they are treated like other corporations for state tax purposes. REITs in Idaho must also adhere to securities laws if they offer their shares to the public, which involves registration and disclosure requirements. It's important for investors to consult with an attorney or tax advisor to understand the implications of investing in REITs, including the specific compliance requirements and the potential benefits, such as the pass-through of income to avoid double taxation.