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Portfolios 407: Real Estate Investment Trusts (REITs)

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1.
If you lose money on your REIT investment, you can offset as much as the following amount from your salary on your income tax return:
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$3,000. You can offset $3,000 in your earned income due to a REIT loss, as well as offset the loss against other securities' gains.
2.
You are most likely to be able to obtain REITs from _______.
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An investment broker. You can buy REITs from the same venues where you might obtain common stock and mutual funds.
3.
The Tax Reform Act of 1986 expanded the powers of real estate investment trusts by _______.
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Allowing them to manage and operate real estate developments. Prior to the Tax Reform Act of 1986, REITs could own real estate, but they could not manage or operate it.
4.
Investors willing to bear a certain amount of risk may receive good yields through a real estate investment trust.
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True. REITs can provide a high yield and a hedge against inflation for investors comfortable with a certain amount of risk.
5.
A real estate investment trust is most likely to invest in _______.
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Factory outlet malls. About one fifth invest in retail enterprises, including shopping centers and factory outlet malls. Lower numbers of REITS also invest in many other different types of real estate, such as residential developments, hotels and resorts, self-storage businesses, and health-care facilities.