Author: Brian Maris and Fayez Elayan

Start Page: 169
End Page: 178
Volume: 6
Issue Number: 2
Year: 1991
Publication: Journal of Real Estate Research

Abstract: Stock price changes on ex-dividend dates are examined to estimate the marginal tax rate of shareholders of common stock in mortgage and equity real estate investment trusts. The stocks are classified on the basis of the dividend yield of the shares and the financial leverage of the underlying REITs, and the mean marginal tax rate of each class of stock is estimated. Results are consistent with tax-induced investor clienteles related to the dividend yield of REITs, both before and after the Tax Reform Act of 1986. Results do not support tax-induced investor clienteles with respect to financial leverage of REITs.