What are the potential tax benefits of private real estate investing?

What are the potential tax benefits of private real estate investing?

An NLI investor’s effective federal tax rate on distributions may be as low as 3.0% when a 90% return of capital (ROC) tax deferral is combined with the 20% rate reduction applicable to ordinary dividend distributions.

REIT distributions are taxed differently depending on whether they are assessed as ordinary income, capital gains, or return of capital. Distributions that would normally be treated as ordinary income may defer their tax liability by deducting real estate related expenses such as depreciation and amortization.