Real Estate Syndicates and Real Estate Investment Trusts

This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?

The General Partnership, also known as Joint Venture, syndication avoids double taxation which a regular corporation would incur, but there is an unlimited liability provision as well as a lack of centralized management.

What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act's inception in 1970?

The Department of Corporations, The California Bureau of Real Estate, The Department of Corporations

Alexandra and Marita's company has qualified as a trust. It has distributed 96% of its income to its shareholders. Which earnings require the payment of federal taxes?

The company only pays federal taxes on the retained earnings, which are taxed at corporate rates. If a company meets the qualifications for a trust by distributing at lease 90% or more of its income to its shareholders, then that company does not pay federal taxes on that distribution but only on the retained earnings, which are taxed at corporate rates.

Real estate syndication

gives a person the chance to channel his or her private savings into real estate investments for which other financing cannot be obtained or is not available because of the large amount of money involved.

real estate investment trust (REIT)

is a type of company that sells securities specializing in real estate ventures, and requires a minimum of 100 investors.

What are the qualifications for putting together a REIT?

One of the legal mandates that must be fulfilled to meet the qualifications for a trust is that the company must distribute at least 90% or more of its income to its shareholders. The REIT must also be owned by at least 100 investors, no five or fewer of whom may hold more than 50% of the interests, and with each share carrying an equivalent vote.

What form is the most frequently used organizational form for real estate syndicates.

The Limited Partnership

Alexandra and Marita have formed a REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alexandra and Marita formed?

A Combination Trust