Posted 1.15.15Economics Chair says "real estate investment trust," or REIT status for Forest City Enterprises will cut what the company pays in corporate taxes.
Professor Robin Dubin, economics department chair at Weatherhead, contributed to the radio broadcast on the regional NPR station, WKSU, regarding Real Estate Investment Trust (REIT) and Forest City Enterprises' corporate structure change.
“As a REIT, they distribute their income to their shareholders in a dividend form, and then Forest City doesn’t pay tax on that money; the shareholders pay tax on the money.”
Under the structure, 95 percent of a company’s profits must go to its shareholders. Dubin says the IRS only allows real estate companies to operate this way. Forest City officials expect to switch to the new structure on January 1 of next year.
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