Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

In South Carolina, as in other states, Real Estate Investment Trusts (REITs) are governed by both state statutes and federal law. REITs are designed to provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties themselves. South Carolina does not have specific statutes that are unique to REITs; instead, REITs in South Carolina are primarily governed by federal tax law, specifically the Internal Revenue Code (IRC). To qualify as a REIT, a company must comply with certain IRS requirements, such as investing at least 75% of its total assets in real estate and paying at least 90% of its taxable income in the form of shareholder dividends each year. By meeting these requirements, a REIT can avoid paying corporate income taxes at the federal level, which is a significant advantage for investors. It's important for investors in South Carolina to consult with an attorney or a tax advisor to understand the specific implications of investing in REITs, including the state's treatment of REIT dividends for tax purposes.