In order for a company in U.S. to qualify as a REIT, it must comply with certain provisions within the Internal Revenue Code. As required by the Tax Code, a REIT must:

• Be an entity that is taxable as a corporation
• Be managed by a board of directors or trustees
• Have shares that are fully transferable
• Have a minimum of 100 shareholders
• Have no more than 50 percent of its shares held by five or fewer individuals during the last half of the taxable year
• Invest at least 75 percent of its total assets in real estate assets
• Derive at least 75 percent of its gross income from rents from real estate property or interest on mortgages on real property
• Have no more than 20 percent of its assets consist of stocks in taxable REIT subsidiaries
• Pay annually at least 90 percent of its taxable income in the form of shareholder dividends

        (Source: NAREIT’s website)

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