SIE practice questionmediumREITs
Which statement about REITs is correct?
- AREITs cannot be publicly traded
- BREITs pass through tax losses to investors
- CREITs must invest exclusively in residential real estate
- DDividends from REITs are generally taxed as ordinary income✓ Correct answer
Explanation
Why D — Dividends from REITs are generally taxed as ordinary income
A is correct; REIT income is typically taxed as ordinary income. B is false—REITs do not pass through losses. C is incorrect as REITs can invest in many types of real estate. D is also incorrect—many are publicly traded.
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