In order for a corporation to qualify as a REIT and gain the advantages of being a pass-through entity free from taxation at the corporate level, it must comply with the following Internal Revenue Code provisions:

• Structured as Corporation, business trust, or similar association
  
  
• Managed by a board of directors or trustees
  
  
• Shares need to be fully transferable
  
  
• Minimum of 100 shareholders
  
  
• Pays dividends of at least 90 percent of REIT's taxable income
  
  
• No more than 50 percent of the shares can be held by five or fewer individuals during the last half of each taxable year
  
  
• At least 75 percent of total investment assets must be in real estate
  
  
• Derive at least 75 percent of gross income from rents or mortgage interest
  
  
• Have no more than 20 percent of its assets consist of stocks in taxable REIT subsidiaries