Chapter 11: Alternative Products

Chapter summary

Chapter 11 covers alternative investments: REITs, direct participation programs, and limited partnerships. REITs must distribute at least 90% of taxable income; distributions have three components taxed differently. DPPs provide pass-through tax treatment but are illiquid. Limited partners have liability capped at their investment. Oil and gas programs offer depletion allowances; real estate programs offer depreciation deductions. Passive loss rules restrict how DPP losses can be used.

Key concepts

• Real Estate Investment Trusts (REITs)
• Direct Participation Programs (DPPs)
• Forming a Limited Partnership
• Tax Considerations
• Types of Limited Partnerships
• Investor Suitability
• Real Estate Investment Trusts (REITs)
• Direct Participation Programs (DPPs)
• Forming a Limited Partnership
• Tax Considerations
• Types of Limited Partnerships
• Investor Suitability

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