What must a REIT distribute to shareholders as dividends to maintain its status?

To maintain its status as a Real Estate Investment Trust (REIT), it is required to distribute at least 90% of its taxable income to shareholders in the form of dividends. This rule is established to ensure that the majority of the income generated from the REIT's operations is returned to investors, which is a key feature of the REIT structure. This distribution requirement allows REITs to avoid corporate income tax, making them an attractive investment vehicle for both individual and institutional investors.

The option that mentions the distribution of 90% of taxable income directly aligns with the governing regulations that define how REITs can operate while benefiting from certain tax advantages. As a result, shareholders receive a significant portion of earnings, which is conducive to periodic income.

Other options, while perhaps referencing financial metrics or principles relevant to corporate distributions, do not embody the specific legal requirement that is crucial for a REIT's operational status.