SIE (Securities Industry Essentials) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the SIE Exam with flashcards and multiple choice questions, each question offers hints and thorough explanations. Gear up for your exam now!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

How can a REIT avoid being taxed as a corporation?

  1. Investing 75% or more in stocks and bonds

  2. Receiving 75% or more of its income from real estate and distributing 90% or more of its net investment income to its shareholders

  3. Investing directly in gold and silver

  4. None of the above

The correct answer is: Receiving 75% or more of its income from real estate and distributing 90% or more of its net investment income to its shareholders

A REIT, or real estate investment trust, can avoid being taxed as a corporation by meeting certain criteria. Option A is incorrect because REITs are required to invest at least 75% of their assets in real estate-related assets, not stocks and bonds. Option C is incorrect because gold and silver are not considered real estate assets. Option D is incorrect because REITs must meet specific requirements in order to qualify for tax exemption as a corporation, and simply choosing none of the options would not fulfill those requirements.

More Questions Like This