Explain the difference between a corporation that only holds real estate and a REIT.

(Select all the choices that apply.)

A.

REITs must pay corporate income taxes; a corporation that holds only real estate does not pay corporate taxes but must substantially pass through all the income to shareholders to whom it is taxable.

B.

A corporation that holds only real estate must pay corporate income taxes; REITs do not pay corporate taxes but must substantially pass through all the income to trust unit holders to whom it is taxable.

C.

A corporation that holds only real estate is limited to 75 shareholders and cannot have corporate or foreign stockholders.

D.

REITs are limited to 150 shareholders and cannot have corporate or foreign stockholders.