Question: The REIT structure does present some significant drawbacks including: ( 1 ) having to pay significant dividends ( 9 0 % of its taxable income

The REIT structure does present some significant drawbacks including: (1) having to pay significant dividends (90% of its taxable income); (2) restricting ownership so that no five shareholders, taken together, can control 50% or more of the equity and by requiring at least 100 shareholders; (3) restricting and separating ancillary (non-real estate) income sources; (4) having to have real estate ownership and operation as the primary business; (5) not permitting high-volume trading of real estate.
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