Real Estate Investment Trusts (REITs) must distribute at least 90 percent of their net annual earnings to shareholders.

Question

Quizplus · Accepted Answer

This is known as the "90 percent rule" and is a requirement of the Internal Revenue Service (IRS) for a company to qualify as a REIT. By distributing at least 90 percent of their taxable income to shareholders annually, REITs are able to avoid paying corporate income taxes and instead allow investors to pay taxes at their individual tax rates.

Real Estate Investment Trusts (REITs) Must Distribute at Least 90