SIE Exam Question 789: Answer and Explanation

Question: 789

All but which of the following are characteristics of REITs?

• A. Losses cannot be passed through to investors to deduct personally.
• B. REIT shareholders are subject to double taxation.
• C. REITs can be purchased in small denominations.
• D. All of the above are correct.

Correct Answer: B

Explanation:

REITs can be purchased in small denominations, and losses cannot be passed through to investors to deduct personally. REIT shareholders are not subject to double taxation.