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My SIE textbook says REITs "offer dividends and gains to investors but do not pass through losses like LPs and, therefore, are not considered DPPs." enter image description here

But Investopedia says "The most common DPPs are non-traded REITs". So are REITs DPPs or not?

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Consensus on numerous sites agrees with Investopedia on this one. The confusion may have to do with equivocation on the term REIT (as a corporate structure/tax identity) and the term REIT (as a type of security). The latter case is where DPP/REIT cannot coexist.

REITs are companies that do business in the real estate space and promise to distribute the overwhelming majority of their taxable income to shareholders in exchange for not having those profits taxed.

DPPs are arrangements between companies and a group of investors.

These terms are not the same, but DPPs can take the form of several corporate structures.

I suspect your text is resolving for this by pointing out that while a given corporation may be a REIT, anyone who invested in that corporation as a DPP founder should not be treating that position as a standard REIT position on their own books.

If Company ABC is a REIT, some of its investors may have helped stand the company up as a DPP scheme, and other investors may later buy in as shareholders. The first group is interacting with ABC as a DPP, the latter as a REIT. The company is a REIT, and the REIT investors are not receiving tax benefits from the losses so they don't count it as a DPP.

Check the passage in your text for information about specific contexts within which this analysis is happening. When in doubt, consult the expert responsible for your training as they'll know what you should remember for any exams.

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