Tax Dodge of the Week: Real Estate Investment Trusts (REITs)
http://www.cnbc.com/id/100660846
A small but growing number of American corporations, operating in businesses as diverse as private prisons, billboards and casinos, are making an aggressive move to reduce or even eliminate their federal tax bills.
They are declaring that they are not ordinary corporations at all. Instead, they say, they are something else: special trusts that are typically exempt from paying federal taxes.
The trust structure has been around for years but, until recently, it was generally used only by funds holding real estate. Now, the likes of the Corrections Corporation of America, which owns and operates 44 prisons and detention centers across the nation, have quietly received permission from the Internal Revenue Service to put on new corporate clothes and, as a result, save many millions on taxes....
Changing from a standard corporation to a real estate investment trust, or REIT a designation signed into law by President Dwight D. Eisenhower has suddenly become a hot corporate trend. One Wall Street analyst has characterized the label as a "golden ticket" for corporations.