The taxpayer is a listed mutual fund trust which holds all of the non-exchangeable LP units in a subsidiary LP which, in turn, holds interests in subsidiary limited partnerships, including Sub-Partnership as well as the shares of the GP thereof. Sub-Partnership will borrow in order to finance the acquisition of additional rental properties or refinance existing borrowings, with the lenders obtaining insurance one of whose conditions is that the taxpayer guarantee such borrowings, and with such borrowings being secured by properties of Sub-Partnership.
The provision of such guarantees by the taxpayer for no consideration would not, in and by themselves, disqualify the taxpayer from satisfying the requirements of s. 132(6)(b).