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Unit 8: Forms of Real Estate Ownership > Ownership of real estate by business organizations > Flashcards

Ownership of real estate by business organizations Flashcards

1
Q

A(n) ___ is a legal entity that exists independently of its members.

A

Business organization

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2
Q

Ownership by a(n) ___ makes it possible for many people to hold an interest in the same parcel of real estate

A

business organization

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3
Q

A(n) ___ is an association of two or more persons who carry on a business for profit as co-owners.

A

Partnership

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4
Q

In a(n) ___, all partners participate in the operation and management of the business and share full liability for business losses and obligations

A

General partnership

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5
Q

A(n) ___ consisits of one or more general partner as well as limited partners.

A

Limited partnership

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6
Q

Limited partners can only be held liable for business losses to the extent of their…

A

own investment

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7
Q

A(n) ___ partnership permits investors with small amounts of capital to participate in large real estate projects with a minimum of personal risk.

A

Limited

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8
Q

Illinois has adopted the federal Uniform Partnership Act, which permits real estate to be held…

A

in the partnership name

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9
Q

The ___ establishes the legality of the limited partnership entity and provides that realty may be held in the limited partnership’s name.

A

Uniform Limited Partnership Act

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10
Q

A legal entity created under the authority of the laws of the state from which it receives its charter

A

Corporation

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11
Q

A corporation is managed and operated by its ___.

A

Board of directors

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12
Q

The ___ sets forth the powers of the corporation, including its right to buy and sell real estate

A

Charter

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13
Q

Because a corporation is a legal entity, it can own real estate either ___ or as a(n) ___.

A

in severalty
or as a tenant in common

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14
Q

How long does a corporation continue to exist?

A

Until the corporation is formally dissolved

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15
Q

Individuals can participate or invest in a corporation by…

A

purchasing stock

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16
Q

Stocks are ___ property

A

personal

17
Q

Do shareholders of stock in a corporation have direct ownership interest in real estate owned by a corporation? Why or why not?

A

No because stocks are personal property

18
Q

A disadvantage of ___ ownership is that profits are subject to double taxation

A

corporation

19
Q

A corporation must file an income tax return and pay tax on its ___.

A

profits

20
Q

In a corporation, what happens with the portion of remaining profits after filing income taxes?

A

Distributed shareholders as dividends

21
Q

Dividends are taxed as part of the ___ income

A

shareholders

22
Q

An alterative form of business ownership that provides the benefit of a corporation as a legal entity buy avoids double taxation is called a(n) ___.

A

S corporation

23
Q

In a(n) ___, only the shares of profits that are passed to shareholders are taxed.

A

S corporation

24
Q

The profits of a(n) ___ are not taxed.

A

S corporation

25
Q

Members of a(n) ___ enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership

A

Limited Liability Company (LLC)

26
Q

A(n) ___ offers flexible management structures without the complicated requirements of S corporations or the restrictions of limited partnerships.

A

LLC

27
Q

In Illinois, the Limited Liability Company Act recognizes LLCs as ___.

A

legitimate business organizations

28
Q

A(n) ___ is two or more people or firms joined together to make and operate a real estate investment

A

Syndicate

29
Q

A syndicate is not a(n) ___.

A

legal entity

30
Q

A syndicate may be organized into which 5 forms of ownership?

A

Tenancy in common
Joint tenancy
Partnership
Trust
Corporation

31
Q

A(n) ___ is a form of partnership in which two or more people or firms carry out a single business project

A

Joint venture

32
Q

Which form of business ownership is normally not intended to establish a permanent relationship?

A

Joint venture

33
Q

By directing funds into a(n) ___, real estate investors take advantage of the same tax benefits as mutual fund investors

A

Real Estate Investment Trust

34
Q

A real estate investment trust does not have to pay ___ as long as 90% of its income is distributed to its shareholders

A

Corporate income tax

35
Q

To qualify as a Real Estate Investment Trust, at least ___% of the trusts income must come from real estate

A

75%

36
Q

Investors can purchase ___ which invests in real estate, mortgages, or both.

A

Certificates in trust

37
Q

Some advantages of a(n) ___ are avoidance of corporate tax, centralized management, continuity of operation, transferability of interests, diversification of investment, and the benefit of skilled real estate advice.

A

Real estate investment trust

38
Q

Disadvantages of a(n) ___ are that investments are passive and usually restricted to very large real estate transactions

A

Real estate investment trust

39
Q

A real estate investment trust must be registered with the ___.

A

Securities and Exchange Commission

Unit 8: Forms of Real Estate Ownership (6 decks)

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