REIT Tax-Equivalent Distribution
This calculator shows a REIT's hypothetical yield and how ROC impacts tax equivalent yield.
How the reit tax-equivalent distribution calculator works
It applies the 20% qualified business income deduction to your tax rate to find the effective rate on REIT dividends, then reduces the yield by that rate to show what you keep after tax.
Worked example: with reit distribution yield of 5.00%, marginal tax rate of 24.00% and qbi (pass-through) deduction of 20.00%, the reit tax-equivalent distribution calculator shows after-tax reit yield of 4.04%.
- Pre-tax yield
- 5.00%
- Effective tax rate
- 19.2%
- After-tax yield
- 4.04%
- Tax saved by QBI
- 0.24%
The formula
Effective tax rate = marginal rate × (1 − 20% QBI deduction). After-tax yield = REIT yield × (1 − effective rate).
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the reit tax-equivalent distribution
How are REIT dividends taxed?
Most are taxed as ordinary income rather than at the lower qualified-dividend rate, but they qualify for the 20% pass-through (QBI) deduction, which softens the blow.
What is the QBI deduction on REITs?
A deduction that lets you exclude 20% of qualified REIT dividends from taxable income, lowering the effective tax rate — currently available through 2025 under existing law.
Where should I hold REITs?
Because their dividends are taxed as ordinary income, REITs are often best held in tax-advantaged accounts like an IRA, where the distributions grow without annual tax.
Is the REIT Tax-Equivalent Distribution free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.