Are REITs subject to Investment Company Act?
REITs rely on Section 3(c)(5)(C) of the Investment Company Act to qualify for exemption from regulation as “investment companies.” Exemption from the Investment Company Act is considered critical for REITs because the operations of most if not all mortgage REITs are incompatible with the Investment Company Act’s rules …
Are REITs subject to 1940 Act?
Collective investment vehicles through which investors participate in the acquisition/origination, construction, (re)development, operation and appreciation of real estate-related assets. Funds are exempt from registration as investment companies under the Investment Company Act of 1940.
Can a REIT be an investment company?
Because they often invest in debt securities secured by residential and commercial mortgages, mortgage REITs can be similar to certain investment companies that are focused on real estate. Many REITs (whether equity or mortgage) are registered with the SEC and are publicly traded on a stock exchange.
Can an LLC be a REIT?
Any entity that would be treated as a domestic corporation for federal income tax purposes but for the ReIT election may qualify for treatment as a ReIT. The net effect of these rules is that an entity formed as a trust, partnership, limited liability company or corporation can be a ReIT.
What makes a REIT a real estate investment trust?
A REIT, or real estate investment trust, is a company that owns – and typically operates – income-producing real estate or real estate-related assets. The income-producing real estate assets owned by a REIT may include real assets ( e.g., apartment or commercial buildings) or real estate-related debt ( e.g., mortgages).
What was the real estate investment trust Act of 2009?
– This Act shall be known as “The Real Estate Investment Trust (REIT) Act of 2009”. Section 2. Declaration of Policy.
Who are real estate funds and the Investment Company Act?
Any person who is not engaged in the business of issuing redeemable securities, face-amount certificates of the installment type or periodic payment plan certificates, and who is primarily engaged in one or more of the following businesses: … (C) purchasing or otherwise acquiring mortgages and other liens on and interest in real estate.
When does an entity elect to be a REIT?
An entity may elect to be treated as a ReIT for any taxable year by filing with its tax return for that year an election to be a ReIT. The election generally remains in effect until terminated or revoked under Code Section 856(g).