Investment VehiclesQuestion 31 of 110
A real estate investment trust (REIT) must generally distribute what portion of its taxable income to shareholders to maintain favorable tax treatment?
a.At least 50%
b.At least 90%
c.No more than 25%
d.Exactly 100% in all cases
Explanation
To qualify for pass-through tax treatment, a REIT must distribute at least 90% of its taxable income to shareholders as dividends. This high payout is why REITs are valued for income. REITs let investors gain real estate exposure without directly owning property.
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