One of the benefits often cited for why a company might use debt to finance its operations is that the interest payments are tax-deductible. But for REITs such as Realty Income Corp. (NYSE:O), these companies already have a tax protection status. So what is the benefit of taking on debt in that situation?

In this segment from Monday's Where the Money Is, Motley Fool financial analysts David Hanson and Matt Koppenheffer look at the world of REITs, and discuss why using reasonable debt can be a very beneficial thing for both a company and its equity holders.

Take advantage of this little-known dividend "loophole"
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

David Hanson has no position in any stocks mentioned. Matt Koppenheffer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Compare Brokers