REITs are exempt from federal income tax provided that they derive at least three-fourths of their income from operations related to real estate and pass through more than 90 percent of their net income to shareholders.

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REITs (Real Estate Investment Trusts) are exempt from federal income tax on the condition that they meet certain requirements, including deriving at least 75% of their gross income from real estate-related sources and distributing at least 90% of their taxable income to shareholders in the form of dividends.

REITs Are Exempt from Federal Income Tax Provided That They