//--Which of the following statements relating to the income taxation of real estate investments is most correct?

• A. A real estate investment trust must pay out most of the income it earns as dividends to avoid being taxed at the corporate level; then those dividends are more heavily taxed than most other investment income when received by the individual shareholders.
• B. An author recommended investing in individual houses (horizontal apartments), because the cost of repairs to individual houses is tax deductible but the cost of repairs to apartment building investments is not.
• C. When investment real estate is sold for a price greater than its basis, Section 1250 recapture lets the investor pay a lower income tax rate on the portion of the gain that results from depreciation claimed than on the portion that results from price appreciation in the market.
• D. Investment real estate sold for more than the value invested in it can qualify for untaxed like-kind exchange treatment, whereas stocks and bonds are not eligible for tax-free Section 1031 treatment.
• E. Both answers a and b above are correct.