Quiz

Question 1 of 10

A real estate investment trust largely escapes entity-level income tax. By what mechanism does it achieve this?

• AIt is exempted from tax by statute regardless of what it does with its income
• BIt deducts the dividends it pays and is required to distribute most of its taxable income, leaving little to tax at the entity level
• CIt reclassifies all of its income as capital gains, which are untaxed
• DIt defers all tax indefinitely by never selling any property