So my understanding is that REITs are designed as pass through entities which pay basically no taxes at the trust level, and instead have the shareholders pay taxes at their marginal income tax/non-qualified dividend tax rate on the return of returns distributions.
Now REITs joined the S&P 500 in 2016 and hence joined VFIAX at the same point. Despite this, Vanguard tags all of the distributions in 2017 (and so far in 2018) as qualified dividends.
Can someone help me make sense of how Vanguard is able to get away without marking those as nonqualified dividends?
Submitted April 26, 2018 at 01:18AM by Urashima_Taro https://ift.tt/2vPjdO0
