Owning fractional shares in property is also nothing like owning property. You’re not going anywhere profound with this line of argument.

This is, of course, incorrect. If you and I bought a house together, took ownership, enjoyed appreciation, and consummated a sale, and realized income, we would owe capital gains tax on the income.

There are some ways we could avoid some or all of it, but I was not considering a situation where you and I shared a primary residence, because we’d spend too much time arguing about taxation basics.

On the other hand, a REIT with more than the required number of members that distributes the required share of profits will pay no income taxes. Investors in the REIT, on the other hand, pay taxes on the dividends.