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
Burdens one parcel of land (the servient estate) for the benefit of another parcel (the dominant estate). ...
maintenance procedures conducted to prevent later repairs and furthering a longer useful life. For example, many boilers and burners are cleaned and serviced each year before the winter ...
Individual who will receive an inheritance upon the death of another. The proceeds of an insurance policy may be in a lump sum annuity. Real estate also passes to the beneficiary. ...
To sign a note on behalf of another individual and, therefore, to guarantee payment. The cosigner is responsible for the loan if the borrower defaults. Such an agreement may occur in ...
(1) Written statement by a responsible individual or entity of the correctness and reliability of something. (2) Written permission to do something, such as receiving a real estate ...
The result of an act or a fact. ...
The Latin term pro rata has a significant meaning in legal, real estate as well as job industries. To define pro rata, anyone can take a quick vocabulary lesson. Any element that is split ...
Day the attachment of property under a judicial order becomes effective. ...
The meaning of an undisclosed principal in everyday use often refers to a confidential client who intends to keep their identity hidden. Typically, this individual remains in the background ...
Have a question or comment?
We're here to help.