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SIE Exam Practice Question 349

Question: 349

To avoid double taxation on dividends paid to shareholders, REITs must invest what portion of their total assets in real estate?

Correct Answer: B

Explanation:

B - REITs can avoid double taxation on profits passed through as dividends to shareholders by concentrating their investments in real estate. At least 75% of total assets must be in real estate, and at least 75% of gross income must be derived from real estate. Also, they must pass through at least 90% of their gains to shareholders.

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