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1 year ago

To qualify as a pass-through entity for U.S. corporate income tax, a REIT must be all of the following EXCEPT

1 answer:

3 0

To qualify as a pass-through entity for U.S. corporate income tax, a REIT must be all of the following EXCEPT : <u>Jointly owned by less than 100 persons.</u>

<h3>What Is a Real Estate Investment Trust (REIT)?</h3>

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate.

Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.

To qualify as a REIT, a company must comply with certain provisions in the Internal Revenue Code (IRC). These requirements include to primarily own income-generating real estate for the long term and distribute income to shareholders.

Specifically, a company must meet the following requirements to qualify as a REIT:

Invest at least 75% of total assets in real estate, cash, or U.S. Treasuries
Derive at least 75% of gross income from rents, interest on mortgages that finance real property, or real estate sales
Pay a minimum of 90% of taxable income in the form of shareholder dividends each year
Be an entity that's taxable as a corporation
Be managed by a board of directors or trustees
Have at least 100 shareholders after its first year of existence
Have no more than 50% of its shares held by five or fewer individuals

Therefore, we can conclude that the correct option is D.

Your question is incomplete, but most probably your full question was:

To qualify as a pass-through entity for U.S. corporate income tax, a REIT must be all of the following EXCEPT

a.structured as a corporation, trust, or association.

b.have transferable shares or certificates of interest.

c.managed by a board of directors or trustees.

d.jointly owned by less than 100 persons.

Learn more about REIT on:

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A financier plans to invest up to $600,000 in two projects. Project A yields a return of 9% on the investment x dollars, whereas

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Answer:

Project A = $240,000

Project B = $360,000

Explanation:

Planned Investment amount = $600,000

Project A = x dollars, with 9% return

Project B = Y dollars, with 16% return

Project B should not exceed 40% of total investment amount

Therefore, if y dollars is spent on project B,

(600,000 - y) is spent on project A

Return on project A :

0.09(600,000 - y) = 54,000 - 0.09y

Return on project B :

0.16y

Total return = return on A + return on B

54,000 - 0.09y + 0.16y

Total return = 54,000 + 0.07y

Note: Project B should not exceed 40% of investment, Therefore,

y <= 0.4(600,000)

y <= 240,000

slope of the function is positive '54,000 + 0.07y', total return increases when y increases.

Therefore return on investment will be maximized when y = 240,000, as it should not exceed 40% for project B and the rest 360,000 can be invested in project A.

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3 years ago

Vasudevan Inc. recently reported operating income of $2.75 million, depreciation of $1.20 million, and had a tax rate of 40%. Th

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Answer:

Free cash flow = $2.25 million.

Explanation:

We know,

Free cash flow = Operating income ×( 1 - tax rate) + depreciation - net working capital.

Given,

free cash flow = ?

Operating income = $2.75 million

tax rate = 40%.

depreciation = $1.20 million.

net working capital = $0.6 million.

Putting the values into the formula, we can get

Free cash flow = [Operating income ×( 1 - tax rate) + depreciation - net working capital] million.

Free cash flow = [$2.75 ×( 1 - 40%) + $1.20 - $0.6] million.

Free cash flow = ($2.75 × 0.6 + $1.20 - $0.6) million.

Free cash flow = ($1.65 + $1.20 - $0.6) million.

Free cash flow = ($2.85 - $0.6) million.

Free cash flow = $2.25 million.

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2 years ago

An owner who wants to have limited liability should form which type of business enterprise?

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3 years ago

Who is most likely to benefit when the Canadian dollar depreciates against the euro? A. Foreign sellers to Canadian buyers B. Ca

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Answer:

Explanation:

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