There Are a Set of Restrictive Conditions That REITs Must

question 30

Multiple Choice

There are a set of restrictive conditions that REITs must satisfy on an ongoing basis in order to maintain their special tax status. All of the following statements regarding the main restrictions are true EXCEPT:

• A) At least 100 investors must own a REIT's shares
• B) No five investors can own more than 50 percent of a REIT's shares
• C) At least 75 percent of the value of a REIT's assets must consist of real estate assets
• D) A REIT must distribute at least 75% of its taxable income to shareholders in the form of dividends.

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Definitions:

Partnership Agreement

A legal document outlining the terms, conditions, and obligations of each partner in a business partnership.

Total Investment

Refers to the cumulative sum of money invested in a particular asset or portfolio over a period of time.

Canadian Dollar

The official currency of Canada, symbolized as CAD in the foreign exchange market.

87.5%

A numerical value representing 87.5 parts out of 100; often used in statistical or financial contexts.