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
Judicial order prohibiting a person or business from doing something. The court may issue this dictate when unlawful conduct or activity is occurring. ...
Payment of the minimum tax by using legal tax planning opportunities such as estate planning. The use of tax avoidance strategies is a sound approach to retaining cash flow. On the other ...
Financing of a home based on how much equity the homeowner has in it. The interest rate is typically a variable one. ...
Geographical area for which a given governmental agency has authority and responsibility. For example, the jurisdiction of a county court is the county in which it is located. ...
Yearly tax return filed by an individual or couple. It is due to the federal taxing authority on April 15 for the preceding calendar year. The taxpayer reports gross income, adjustments to ...
Hallow masonry wall consisting of an inner and outer wall with dead air space between them. The air space provides increased thermal insulation. Cavity walls are not used in northern ...
Accelerated depreciation method in which the amounts recognized in the early years of the property's useful life are greater than those recognized in the later years. The SYD is found by ...
Negative characteristics about real property which do not meet the needs of the usual occupant. Examples are inadequate lighting in the rooms and a one-car garage when a two-car garage is ...
Real estate bought and leased to tenants to obtain rental income. ...
Have a question or comment?
We're here to help.