Thanks for the question, Rita. Real estate investing is certainly one of the more tax-efficient ways to invest money, but unfortunately the answer is no.
For a little more color: Real estate investment trusts, or REITs, certainly do get the benefit of depreciation from the properties they own. However, REITS claim depreciation on their own in order to reduce tax liability; it isn't passed on to shareholders. REITs are required to pay out at least 90% of taxable income to shareholders in order to avoid corporate taxes, and depreciation is used to reduce the REIT's taxable income.
So, you're getting the benefit of depreciation in the sense that your REITs don't have to pay out as much as they otherwise would and therefore will have more money left to reinvest in their business. But it doesn't do you much good when it comes to lowering your own tax bill. In fact, REIT dividends typically have a higher tax rate than dividends paid by most other types of stock investments.
The only way to use REIT investing to lower your tax bill would be to sell a REIT at a lower price than you paid for it, which obviously isn't a desirable outcome.
If you're looking for real estate investments that can immediately lower your taxes, you may be able to do it via buying an investment property. Through depreciation and other allowable expenses, it's quite common for cash-flowing investment properties to show a loss for tax purposes.
However, the only way you can use any investment property losses to offset your other income each year is if both of these conditions apply:
You actively participate in the investment. In other words, you can't just buy an investment property, have a property manager deal with everything else, and claim a loss. But if you manage the property yourself, find tenants, or otherwise play an active role, you may be able to deduct your rental income "losses."
Your modified adjusted gross income (MAGI) is $100,000 or less.
If both of these are true, you can deduct rental property losses of up to $25,000 per year, which can certainly help lower your tax bill.
Finally, it's worth noting that while investing REITs won't directly lower your tax bill, buying them through a traditional IRA or other tax-deferred retirement account can. For example, Americans who qualify can set aside $6,000 in a traditional IRA ($7,000 if you're 50 or older), and your entire contribution can be tax deductible. And you won't pay a dime of tax on any dividends the REITs pay you or any capital gains tax if you sell your REITs at a profit. Your investment will be completely tax-deferred until you actually withdraw money from the account.