How To Succeed in Business Without...

AITOOW is aware that corporations are avoiding state income taxes by placing their properties in tax-exempt real estate investment trusts (REITs) and then renting the locations back to themselves? The REIT's they place their properties into pay no taxes on their "profits" (tax exempt). When the corporations lease the locations back to themselves, they take a deduction for the cost of the lease (in the amount the REIT income) that lowers it's EBITA which lowers the tax due. Most don't disclose the existence of the trusts in their annual reports. REIT's were initially created to help small investors put money in a diverse portfolio of property (ie a mutual fund). In this case, a REIT is not being used as real estate management tool, but, a tax avoidance tool. Some corporations are estimated to be avoiding multiple tens of millions of dollars in taxes this way.