A direct participation program in real estate does NOT have which of the following characteristics?

In a direct participation program (DPP) related to real estate, the focus is often on the passive nature of the investment. Investors typically participate in the income and potential appreciation of the property without being involved in the day-to-day management. A defining characteristic of DPPs is that they generally do not issue cash dividends as seen with traditional corporations; instead, returns are usually distributed in the form of income derived from property rents or gains from property sales.

DPPs seek to provide tax benefits primarily through deductions tied to depreciation and other operational expenses, which can significantly enhance investor returns. Shareholder control over the investment is typically limited, as investors are not managing the property themselves but are instead reliant on a general partner or managing entity to handle operations. Furthermore, investment liquidity is lower because DPPs often involve private placements, making it difficult to sell interests quickly.

The correct answer highlights that cash dividends are not a standard feature of direct participation programs in real estate, distinguishing them from corporate investments that often distribute regular dividends to shareholders.