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:

SIE - Account Statements

Series 53 - Refunding Bonds

Series 24 - Corporate Accounts

Series 79 - 13.2.1. Tender Offers Conducted by an Affiliate of the Issuer

Series 50 - Kinds of 529 Plans

Series 24 - Rule 15g-9 – Sale Requirements

Series 24 - 2.8.1.2. Notification Requirements

Series 63 - 4.7.2.1. Definition of an Advertisement

Please Enable Javascript
to view this content!

Site Login

TESTIMONIALS

What are people saying?

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 the S7 TO first time it was introduced from last year. I have used several books and none of them could be as complete as this one. I am a living witness to the completeness of your course material. If that was not the case, I would not have passed this very difficult exam. I owe my success to your exam materials and no other book, from those I know have come close. I am going to study for the Series 66 through Solomon Exam Prep. If this can help me through, then I am sure many more people would also succeed.

Stalin Miki, Bankerslife, Miami, FL

I found encouragement along the way from reading other people's testimonials, so payback is to write one of my own. Solomon is the gold standard for customer service. I passed the 66, SIE first tries -- received a 69% on the 7 (failed), but passed on the 2nd attempt. I'm in awe over the outreach I received from day 1 but especially from Jeremy on how to move forward after falling short on the Series 7 - followed his advice - one of which was to get the accompanying videos and passed. Watching/studying the Chapter 5 video had a big impact. I also printed the questions I got wrong that I particularly struggled with while taking the online exams, printed and/or turned them into flashcards, then taped many of them around the house. It forced me to constantly revisit the information and moved me past a superficial understanding. I'll take a messy-looking home for a short time than having to retake a 3 hour and 45 minute exam.

Brook Langston, Everspire. Salt Lake City, UT

Thank you so much for your great study materials! I have used you to pass my Series 6, 63 and most recently my Series 7 all on the first try. The practice exams and video lectures were great and extremely helpful. Will definitely be using your study material for any future exams and will recommend you to other people

Louis Orsatti, NY LIFE Securities, Boston, MA

Thank you so much Solomon Prep for helping me to be able to successfully pass all three of my exams (SIE, Series 7 and Series 66) in a relatively short period of time. The exam packages were excellent! I will continue to refer people to your amazing program!

Jessica Macci, Goldman Sachs. Albany, NY

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