REE4303 EXAM 2025 QUESTIONS AND
ANSWERS
WHY REITS? - ANS COMPETITIVE, LONG-TERM PERFORMANCE, SUBSTANTIAL STABLE
DIVIDEND YIELDS, TRANSPARENCY, PORTFOLIO DIVERSIFICATION
WHAT IS A REIT? - ANS -CORPORATIONS THAT DEVELOP, OWN AND MANAGE INVESTMENT-
GRADE CRE
- ARE NOT: MUTUAL FUNDS, CLOSE-ENDED FUNDS OR PARTNERSHIPS
-PROVIDE INEXPENSIVE WAY TO INVEST IN CRE WITHOUT BUYING PROPERTY DIRECTLY
TAX OPERATIONS REITS - ANS -OPERATE UNDER SAME TAX, REGULATORY & FINANCIAL
REPORTING RULS AS ALL CORPORATIONS
-"QUALIFIED" REITS MAY DEDUCT DIVIDENDS PAID FROM CORPORATE TAXABLE INCOME,
TAXES ARE PAID BY SHAREHOLDERS AS DIVIDENDS
WHAT QUALIFIES AS A REIT? - ANS -STRUCURED AS A CORPORATION(PASS THROUGH
ENTITIY)
-PAY DIVIDENDS OF >90% OF REITS TAXABLE INCOME
-STOCKS MUST BE WIDELY HELD, >100 SHAREHOLDERS, NO MORE THAN 50% OF SHARES CAN
BE HELD BY 5 OR FEWER INVESTORS
-COMPANY MUST BE IN RE "BUSINESS"
WHAT % ASSETS AND GROSS INCOME MUST COME FROM RE IN A REIT? - ANS -ATLEAST 75%
FOR BOTH
COPYRIGHT © 2025 BRAINBARTER ALL RIGHTS RESERVED 1
, HOW ARE REITS DISCOURAGES FROM ACTIVELY SELLING/CHURNING PROPERTY? - ANS REITS
PAY 100% TAX ON PROFITS FROM SALE OF "DEALER" PROPERTY
A "SAFE HARBOUR" EXISTS WHERE A REIT CAN AVOID THE 100% EXCISE TAX IF ALL THE
FOLLOWING ARE TRUE: - ANS 1. Property was held at least 2 years
2. Aggregate CAPXs on property during 2 years prior to its sale were < 30%of sale price
3.REIT does not: make more than 7 sales of property in the year, or sell more than 10% of its
assets (based on book value or fair market value, atREIT's option)
These rule changes were part of the Housing & Economic Recovery Actof 2008
WHAT ARE THE 3 TYPES OF REIT? - ANS -PRIVATE REITS
- PUBLIC, NON-LISTED REITS (PNLRS)
-LISTED (PUBLICLY-TRADED) REITS
CHARACTERISTICS OF PRIVATE REITS: - ANS -PRIVATELY ISSUED AND NARROWLY HELD
-NOT ON STOCK EXCHANGE
-BECAUSE DATA ARE LIMITED TO IRS FILINGS, PRIVATE REIT COUNTS AND INFO ARE DIFFICULT
TO OBTAIN
-LESS LIQUID THAN PUBLIC REITS
-ABOUT 800 PRIVATE REITS TOTAL
CHARACTERISTICS OF PUBLIC, NON-LISTED REITS (PNLRS) - ANS -AVAILABLE TO ALL
INVESTORS, BUT NOT LISTED ON STOCK EXCHANGE
-LOOK AND FEEL LIKE CLOSE-ENDED PRIVATE EQUITY FUNDS
-SHARES ARE SOLD THROUGH A FINANCIAL PLANNER AT A FIXED PRICE
-SUBJECT TO SAME SCRUTINY BY SEC
-LESS LIQUID THAN PUBLICLY-LISTED REITS
COPYRIGHT © 2025 BRAINBARTER ALL RIGHTS RESERVED 2
ANSWERS
WHY REITS? - ANS COMPETITIVE, LONG-TERM PERFORMANCE, SUBSTANTIAL STABLE
DIVIDEND YIELDS, TRANSPARENCY, PORTFOLIO DIVERSIFICATION
WHAT IS A REIT? - ANS -CORPORATIONS THAT DEVELOP, OWN AND MANAGE INVESTMENT-
GRADE CRE
- ARE NOT: MUTUAL FUNDS, CLOSE-ENDED FUNDS OR PARTNERSHIPS
-PROVIDE INEXPENSIVE WAY TO INVEST IN CRE WITHOUT BUYING PROPERTY DIRECTLY
TAX OPERATIONS REITS - ANS -OPERATE UNDER SAME TAX, REGULATORY & FINANCIAL
REPORTING RULS AS ALL CORPORATIONS
-"QUALIFIED" REITS MAY DEDUCT DIVIDENDS PAID FROM CORPORATE TAXABLE INCOME,
TAXES ARE PAID BY SHAREHOLDERS AS DIVIDENDS
WHAT QUALIFIES AS A REIT? - ANS -STRUCURED AS A CORPORATION(PASS THROUGH
ENTITIY)
-PAY DIVIDENDS OF >90% OF REITS TAXABLE INCOME
-STOCKS MUST BE WIDELY HELD, >100 SHAREHOLDERS, NO MORE THAN 50% OF SHARES CAN
BE HELD BY 5 OR FEWER INVESTORS
-COMPANY MUST BE IN RE "BUSINESS"
WHAT % ASSETS AND GROSS INCOME MUST COME FROM RE IN A REIT? - ANS -ATLEAST 75%
FOR BOTH
COPYRIGHT © 2025 BRAINBARTER ALL RIGHTS RESERVED 1
, HOW ARE REITS DISCOURAGES FROM ACTIVELY SELLING/CHURNING PROPERTY? - ANS REITS
PAY 100% TAX ON PROFITS FROM SALE OF "DEALER" PROPERTY
A "SAFE HARBOUR" EXISTS WHERE A REIT CAN AVOID THE 100% EXCISE TAX IF ALL THE
FOLLOWING ARE TRUE: - ANS 1. Property was held at least 2 years
2. Aggregate CAPXs on property during 2 years prior to its sale were < 30%of sale price
3.REIT does not: make more than 7 sales of property in the year, or sell more than 10% of its
assets (based on book value or fair market value, atREIT's option)
These rule changes were part of the Housing & Economic Recovery Actof 2008
WHAT ARE THE 3 TYPES OF REIT? - ANS -PRIVATE REITS
- PUBLIC, NON-LISTED REITS (PNLRS)
-LISTED (PUBLICLY-TRADED) REITS
CHARACTERISTICS OF PRIVATE REITS: - ANS -PRIVATELY ISSUED AND NARROWLY HELD
-NOT ON STOCK EXCHANGE
-BECAUSE DATA ARE LIMITED TO IRS FILINGS, PRIVATE REIT COUNTS AND INFO ARE DIFFICULT
TO OBTAIN
-LESS LIQUID THAN PUBLIC REITS
-ABOUT 800 PRIVATE REITS TOTAL
CHARACTERISTICS OF PUBLIC, NON-LISTED REITS (PNLRS) - ANS -AVAILABLE TO ALL
INVESTORS, BUT NOT LISTED ON STOCK EXCHANGE
-LOOK AND FEEL LIKE CLOSE-ENDED PRIVATE EQUITY FUNDS
-SHARES ARE SOLD THROUGH A FINANCIAL PLANNER AT A FIXED PRICE
-SUBJECT TO SAME SCRUTINY BY SEC
-LESS LIQUID THAN PUBLICLY-LISTED REITS
COPYRIGHT © 2025 BRAINBARTER ALL RIGHTS RESERVED 2
