Page 6 - IreitEbook

• Be an otherwise taxable corporation

• Be governed by a board of directors or trustees

• Have fully transferable shares

• Include no less than 100 shareholders after its first full year of existence as a

REIT

• Have no less than 75% of its total assets invested in real estate and cash

• Get no less than 75% of its gross income from real estate and real estate-

related aspects, such as real property rent and interest from mortgages that finance

real property

• Derive no less than 95% of its gross income from real estate and real estate-

related aspects

• Have no more than 25% of its assets consist of non- qualifying securities or

stock in taxable REIT subsidiaries.

Plus, REITs are specifically set up to keep them from being any one person or elitist

group’s tax-evasion effort. No more than 50% of their shares can be held by five or

less people during the last half of their taxable year.

While those regulations do keep REITS in a well-defined box, there’s

still plenty of room in there for smaller categories, classifications and even a

growing number of interpretations.

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