Series 7: Exercise

Taken from our Series 7 Online Guide

Exercise

Answer true or false.

1. _____ REITs are exempt from federal taxes at the corporate level.

Answer the following questions.

2. Which of the following statements is true?

A. Equity REITs buy mortgages, construction loans and mortgage-backed securities and receive most of their income from interest.

B. Hybrid REITs buy properties and rehab them to energy efficiency standards and receive most of their income from federal tax credits.

C. Mortgage REITs provide financing for real estate projects.

D. A REIT must have at least 1,000 shareholders.

3. What is the best argument for REITs being exempt from corporate taxation?

A. Real estate is a high-risk investment, and being exempt from taxation helps a REIT survive as a business.

B. REITs pass their income through to shareholders, who pay taxes on it.

C. REITs allow investors of all income levels to invest in real estate.

D. All three types of dividend distribution are taxed at the same rate, simplifying taxes on REIT income.

4. According to the IRS, a REIT must return what percentage of its taxable income to shareholders in the form of dividends?

A. 90%

B. 75%

C. The IRS does not specify a percentage

D. 100%

5. What percentage of a REIT’s gross income must come from real estate sources?

A. 90%

B. 75%

C. 95%

D. 50%

6. What percentage of a REIT’s assets must be invested in real estate sources?

A. 90%

B. 75%

C. 95%

D. 50%

Answers

1. False. REITs are completely exempt from federal income tax on corporate income only if they pay out 100% of their earnings to shareholders. They must pay out at least 90% to be exempt from taxes on any portion of their earnings. They must p

+ Read More

More Series 7 Info

What are people saying?

Create an Account

Since you're reading about Series 7: Exercise, you might also be interested in:

Series 50 - Disclosure Requirements

SIE - Business Cycles

Series 6 - 4.1.1.2.5. Right to a Residual Claim During Liquidation

Series 6 - 7.5.1.3. Financial Exploitation of Vulnerable Adults

Series 50 - Arbitrage Rules

Series 6 - 7.5. Responsibilities to Customers and Recordkeeping Requirements for Broker-Dealers and Associated Persons

Series 24 - Second Market: Nasdaq Rules and Regulations

Series 65 - 4.2.2.1 Hedging With Protective Puts and Calls

Series 65 - 1.4.1.1.1 Gross Profit

Please Enable Javascript
to view this content!

Site Login

TESTIMONIALS

What are people saying?

Jeremy, I passed the Series 7 yesterday with an 87% using only your book and online practice tests. Thanks!

Aaron Johnson, Humble, TX

I am still so giddy that I passed my Series 7 on 1/31. I truly cannot believe it. I took the 7 three times in 2019 utilizing Kaplan study materials and didn't feel good going into the tests any of the times. So shockingly I failed all three times by a lot. My highest score was a 68%. I used Solomon for my 51 in September (passed on the first try) so I thought I could try it for my 7 even though it is the hardest securities test I have taken. I felt so good going into the testing center and I passed!!! I am so grateful to have found your materials. They have been incredibly helpful and I am able to understand all the material covered in the books. I still am in shock that I passed. Now off to the 24!

Briana Turner, Cambridge Investment Research. Virginia Beach, VA

Dear Solomon Team, Happy to inform you that I took and passed the Series 7 this past Tuesday. I was not able to prepare as much as I had planned, and would not recommend someone taking the exam at the point I was at in my preparation, but the circumstances demanded it and it worked out. The depth and breadth of material I was able to cover with Solomon obviously played no small part. I am deeply grateful for your partnership for both the SIE and the 7 top-off as I transition from law practice into an RIA compliance role. This has been a big change and your materials and support have been indispensable. I want to particularly note that your audiobook feature is a key distinguishing factor for me. It undoubtedly helped me absorb the material and is an ideal complement to material that is presented in such a way as to benefit those of us who need to learn the “why’s” in the material and not just a series of independently-existing spontaneously-combusted facts. I’m sure both methods work for exam takers, but Solomon excels in the former. Also, as a dad to a half-dozen crew and an auditory learner, an audiobook format helps when your geographic coordinates at the start of a lesson are not the same as those at the end. Thanks again to everyone at Solomon!

Eduardo Mordujovich, Gainesville, FL

Completing the Series 7 was a requirement for my current position. After seeing the material and dedication Solomon Exam Prep put into the SIE material, I knew Solomon’s material would be perfect for me again. I had access to STC material and tried to go through it first but it was too content heavy and at certain points, very confusing. I decided to move back over to Solomon for the 7 and was blown away yet again by how great the material is. Solomon has figured out how to properly prepare people for this exam in my opinion. Solomon Exam Prep focuses on teaching the concept rather than bogging you down with so much material. THAT IS SO HELPFUL! Of course the material is important but it’s extensive. After using Solomon Exam Prep for the Series 7, I was able to fully understand the concepts which made it so much easier to select the best questions on the exams. All the other training programs bury you deep with content, which makes it almost impossible to understand the concepts. If you get questions on the exam that you have not seen before, only knowing specific material will not help you. But if you understand the concepts (like Solomon Exam Prep helped me do) you can break down the question and find the best answer based on your understanding of the concept as a whole. That’s a much better method and Solomon Exam Prep has figured this out! I strongly suggest buying the study guide. You won’t regret it!

Jared M. Albany, New York

I passed first try! Three hours and forty-five minutes might seem like a long time, but it flew by. The Solomon Exam Prep conditioned me very well. Utilizing the chapter quizzes and practice exams really helped apply my learning, and also helped with time management. (Series 7)

Ryan Thibault, PNC Investments. Lakewood, OH.

Solomon Exam Prep materials are head and shoulders above any other company's products. I have purchased several other companies' materials and found that when it came time to take the crucial step of practice exams, every other company's answer explanations simply were too brief to be truly educational, or worse, sometimes contradictory to the text. That is when I turned to Solomon Exam Prep. After purchasing their materials, an actual team member emailed me almost every other day to ask how I was doing with my studying and offered assistance if I had questions. With this kind of support, you aren't trying to climb the mountain of becoming licensed alone! Finally, the owner also contacted me several times to thank me for my purchase and to check on my progress. There is no other company out there doing business in this exemplary way. Please be kind to yourself and START with Solomon Exam Prep materials for the BEST of success!

Rebecca Spadafore - Financial Advisor, LPL Financial. Meadville/Erie Area, PA SIE, Series 7, Series 66