Just got a question from someone about how to actually sell my REIT shares, and realized a lot of people probably don't fully understand the differences between doing this with publicly traded versus non-traded REITs. Worth breaking down because the process is pretty different depending on what you hold.

So first, what even is a REIT? Basically these are companies that own or finance income-generating real estate across different sectors - office buildings, retail spaces, apartments, hotels, data centers, that kind of thing. The appeal is you get exposure to real estate without having to buy actual property. They're required to distribute at least 90% of their income to shareholders as dividends, which is why they tend to offer pretty solid dividend yields.

If you're holding publicly traded REITs, selling is straightforward. You just go through your brokerage account like you would with any stock. Liquidity is generally not an issue, so you can move your shares at market value pretty quickly. The tricky part is market conditions can obviously affect what price you actually get - REIT valuations move with broader real estate trends and market sentiment.

Non-traded REITs are a whole different story though. These aren't listed on public exchanges, so liquidity is way more limited. Most investors have to hold them for five to seven years before they can even sell. And even after that lock-up period ends, finding buyers can be tough. Some non-traded REITs have redemption programs, but they usually come with a discount to face value. Fees can also eat into your returns - sometimes as much as 15% of the offering price if you're trying to get out early.

Then there's the tax side of things. If you sell your REIT shares for more than you paid, that's a capital gain. Hold them less than a year and you pay ordinary income tax rates. Hold them longer and you get the more favorable long-term capital gains treatment. The dividends themselves get taxed as ordinary income, not at the lower qualified dividend rate, though depending on your situation there might be deductions available.

Let's say you bought REIT shares for 50k and sold them five years later for 80k. That 30k profit gets taxed at the long-term rate since you held it over a year. The dividends you collected along the way? Taxed as regular income. It adds up, so worth understanding before you sell my REIT positions.

Bottom line: publicly traded REITs give you the flexibility to sell when you want, but non-traded ones come with serious restrictions and potential fees. And tax planning matters - longer holding periods definitely work in your favor. If you're thinking about selling, worth reviewing your specific REIT's terms first or talking to someone who can walk you through the tax implications.