Equity Trusts
Definition of "Equity trusts"
Same as term REIT: Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for shareholders. Shareholders receive income from the rents received from the properties and receive capital gains as properties are sold at a profit. REITs have been formed by a number of large financial institutions such as banks and insurance companies. The stocks of many of them are traded on security exchanges, thereby providing investors with a marketable interest in real estate investment portfolio. By law, REITs have to distribute 95 percent of their income to shareholders, and in turn they are exempt from corporate taxes on income or gains. In exchange for this special tax treatment, REITs are subject to numerous qualifications and limitations including:
- Qualified asset and income tests. REITs are required to have at least 75% of their value represented by qualified real estate assets and to earn at least 75% of their income from real estate investments.
- Shareholder qualifications. Generally, REITs are not permitted to be closely held and must have a minimum of 100 shareholders.
Popular Real Estate Terms
In our world, you can request anyone to perform virtually any task for a little (or bigger) incentive. So, what is the definition of incentive precisely? An incentive can be a service or ...
When you hear the term annuity, you’re often left wondering what is an annuity? The simplest annuity definition is a financial product designed to ensure cash flows at equal intervals ...
Insulating material attached to crevices around doors and windows to prevent air from either entering or escaping from a structure. Tacked, stapled, or glued onto the surfaces of the doors ...
mortgage being reduced through periodic principal and interest payments. ...
Losses arising from damage to or destruction of property. ...
Creates a lien against the mortgagor's property, but does not permit a lien against his or her personal assets. See also non recourse. ...
Created by law usually for the right to travel to landlocked parcel of land ...
Certificate usually granted by a jurisdictions building department certifying a specified premise has satisfactorily complied with all zoning and building ordinances. This certification is ...
Unexpected increase in the price of property not due to any effort on the owner's part. An example is when the appraised value of a house increases because of a population increase in the ...
Have a question or comment?
We're here to help.