Tax sheltered Shares

THE tax man taking a big bite out of your stock dividends? Then you may want to consider a form of stock whose returns are at least partly sheltered from taxes. They go by such odd names as REITs and FREITs.

REITs are real estate investment trusts. They own income producing properties or make mortgage loans and pay regular dividends to shareholders. Some of these payments may be considered a return of capital and therefore are not directly taxable. Eventually, of course, you will have to pay taxes on your accumulated profits when the REIT sells some of its properties.

Some investors prefer a second type of investment called finite life REITs, or FREITs. They sell off their properties or distribute the profits according to a fairly fixed schedule, typically starting in the sixth year after they are set up.