Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

In Nevada, Real Estate Investment Trusts (REITs) are governed by both state statutes and federal law. REITs are designed to provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties themselves. To qualify as a REIT under federal law, a company must comply with certain Internal Revenue Code requirements. These include primarily investing in real estate, distributing at least 90% of taxable income to shareholders annually in the form of dividends, and meeting certain organizational and operational tests. Nevada state law also provides regulations that govern the formation, operation, and taxation of REITs within the state. These laws are designed to ensure that REITs operate within the legal framework intended to provide benefits to investors and the economy, such as the pass-through of income to avoid double taxation at the corporate level. Investors in Nevada REITs are subject to state securities laws and regulations, which are enforced by the Nevada Securities Division, as well as federal securities laws enforced by the Securities and Exchange Commission (SEC).