REITs are required to pay out 90 percent of their earnings as dividends.

Name: REITs are required to pay out 90 percent of their earnings as dividends.
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This is known as the "90 percent rule" and is a requirement for a company to be classified as a REIT (real estate investment trust) by the IRS. REITs are exempt from federal income tax as long as they distribute at least 90 percent of their taxable income to shareholders as dividends.

REITs Are Required to Pay Out 90 Percent of Their