Real estate investment trust (REIT)

A company that owns, operates or finances income-producing real estate and pays no corporate income tax on what it distributes, in exchange for meeting tax-code tests: chiefly, distributing at least 90% of its taxable income and keeping most of its assets and income in real estate. Most of its dividends are taxed as ordinary income, partly offset by a 20% deduction for qualified REIT dividends.