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Tax-Favored Money Grows On Trees

By newadmin / Published on Wednesday, 14 Feb 2018 23:19 PM / No Comments / 6 views


profiled in Forbes inspired me to look for publicly traded firms in the same line of work. There are more than a few, and they tend to be organized as real estate investment trusts.

If you want growth in your portfolio, standing timber is not a bad way to get it. Lumber barons get to treat their profits from harvesting wood as low-taxed capital gains. That cushy deal extends to shareholders in forest-product companies organized as Reits.

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Potlatch (PCH), for example, paid out $1.53 a share last year, all of it classified as long-term gain. When it completes a pending acquisition, this Reit will have 1.9 million acres of timberland and ample opportunity to make that dividend greener. Rayonier (RYN), another tree Reit, owns, leases or manages 2.7 million acres. Its $1 dividend last year was 100% capital gain.

I describe the peculiar, but very investor-friendly, tax treatment of Reits more generally in this story.

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A tree entrepreneur profiled in Forbes inspired me to look for publicly traded firms in the same line of work. There are more than a few, and they tend to be organized as real estate investment trusts.

If you want growth in your portfolio, standing timber is not a bad way to get it. Lumber barons get to treat their profits from harvesting wood as low-taxed capital gains. That cushy deal extends to shareholders in forest-product companies organized as Reits.

Shutterstock

Potlatch (PCH), for example, paid out $1.53 a share last year, all of it classified as long-term gain. When it completes a pending acquisition, this Reit will have 1.9 million acres of timberland and ample opportunity to make that dividend greener. Rayonier (RYN), another tree Reit, owns, leases or manages 2.7 million acres. Its $1 dividend last year was 100% capital gain.

I describe the peculiar, but very investor-friendly, tax treatment of Reits more generally in this story.

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