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:

Deposit

Money placed into a financial institution for safekeeping or into an account to fulfill a financial requirement.

Balance

The amount of money held in a financial account at any moment, reflecting all transactions.

Account

A record summarizing all the transactions pertaining to a single item in the accounting equation.

Lockbox Services

Bank-provided services that expedite the collection and processing of account receivable payments by having them sent directly to a secure post office box.