Real Estate Investment Trusts are corporations, trusts or associations that act as agencies in real estate and associated mortgages. This is a specialized tax segment and it requires recognition by the Internal Revenue Service to operate as a Real Estate Investment Trust (REIT).
Real Estate Investment Trusts (REIT) are tax free business entities that invest in real estate developments and multi-family housing. There are strict compliance requirements to maintain this tax status. In general, the investors must by paid at least 90% of the earnings every year.