Real Estate Investment Trust. A real estate mutual fund, allowed by income tax laws to avoid corporate income tax. It sells share of ownership and must invest in real estate or mortgages. It must meet certain other requirements, including number of shareholders, widely dispersed ownership, asset and income tests. If it distributes 95 percent of its income to shareholders, it is not taxed on that income, but shareholders must include their share of REIT’s income in their personal tax returns.