What percentage of income must a REIT derive from dividends, interest, and property income?

Real Estate Investment Trusts (REITs) are required to derive at least 75% of their gross income from specific sources related to real estate activities. This includes dividends, interest, and property income, which is essential for a REIT to maintain its status and tax benefits. By generating at least 75% of their income from these sources, REITs can qualify for favorable tax treatment, particularly being able to avoid corporate income taxes if they distribute at least 90% of their taxable income to shareholders in the form of dividends. This structure encourages investment in real estate while providing a steady income stream to investors.