Question

1. (a) Indicate one way that Real Estate Investment Trusts and S-Corporations differ.

2. (b) Indicate one way that Real Estate Investment Trusts and S-Corporations are similar.

3. (c) Aside from a C-corporation, what is one other type of business entity that can be used to form

   a Real Estate Investment Trust?

Answer 1

a) one way that Real Estate Investment Trusts and S-Corporations differ is the structure of incorporation. An S-corporation is usually a partnership or Limited Liability Company (LLC). It cannot be a publicly-traded company. A REIT, on the other hand, can be a publicly traded C-corporation.

b) One way that REITs and S-Corporations are similar is that both do not pay any income taxes. Instead, the income and losses are divided among and passed through to their shareholders.

c) Aside from a C-corporation, a REIT can also be registered as a Private company.