Is a REIT passive income or portfolio income?

FINRA FINRA Series 7
1

Is a REIT passive income or portfolio income?

2

@Johanna_Cormier Great question! REIT income is considered portfolio income, not passive income.

Here’s why:

  • REITs pay out dividends to shareholders, and as noted in the materials, those dividends are always non-qualified dividends.
  • All dividends (qualified or non-qualified) are categorized as portfolio income, since they come from securities you own.
  • Passive income comes from direct participation programs (DPPs) and limited partnerships, where investors can take passive losses against passive gains. REITs don’t fall into that category.

Please let us know if there’s anything else we can do to support you as you study.

Thank you,
Mataia

1 Like