1. ( T or F ) Since dividends are not UBTI, a tax exempt investor will not have UBTI on dividend income when debt is used to purchase the stock that paid the dividend.

2. (T or F) An individual, who qualifies as a real estate professional, can treat a particular rental real estate activity as non-passive even when that individual does not materially participate in the real estate activity.

3. (T or F) Withholding tax to non-US investors on interest income and dividends may be reduced under the terms of a treaty.

4. Assume a building, owned by a REIT, increases in value and the REIT that owns it sells the building for $120 million and then makes a capital gain distribution to its shareholders. Which of the following is true regarding a U.S. individual investor's tax treatment:

A. The gain on the sale will be taxed at the ordinary income tax rate.

B. The gain on the sale will be taxed at the capital gain tax rate.

C. There is no tax on the net gain at the shareholder level.

D. The tax treatment is the same for the US investor as it is for the foreign investor. E. None of the above.