Converting to a REIT, Weyerhaeuser will lower its federal tax by 35%, increase shareholder distributions, and pay out a huge initial distribution, amounting to about $26. WY shares sell for about $37.
Most of that initial payout will be in the form of stock; cash distributions are limited to 10% of the total distribution.
According to the message boards, the distribution will be taxable and may result in taxes greater than the cash payout.
REITs often pay no corporate income tax.
No comments:
Post a Comment