7897. What are the income-related qualification requirements that a REIT must satisfy?Alexis Longrcline202014-09-18T14:52:00Z2014-09-18T14:52:00Z2170971Summit Business Media821139147897. What are the income-related qualification requirements that a REIT must satisfy? In order to ensure that REITs continue to further the legislative intent that their income should primarily be derived passively from real estate activities, a REIT must satisfy both of the following income tests in order to qualify as a REITIRC Sec. 856(c)(2) and (c)(3).:75 Percent Income Test: At least 75 percent of the REIT’s gross income each tax year must be derived from rents, mortgage interest, gain from the sale of real property, dividends received from other qualified REITs and certain other income derived from real estate sources.The 95 Percent Income Test: At least 95 percent (90 percent for taxable years beginning before January 1, 1980) of the REIT’s gross income must be derived from (a) items that qualify for the 75 percent income test and (b) income from interest, dividends, gain from the sale of stocks or other securities and certain mineral royalty income.Unlike in the case of the asset-based qualification tests, the income-related qualification tests must only be satisfied at the close of each tax year (rather than on a quarterly basis).