5-911036
Dear Sirs:
Re: Status as a Manual Fund Trust
We are writing in response to your letter of April 12, 1991, in which you request a technical interpretation of paragraph 132(6)(b) of the Income Tax Act. In particular you ask whether a trust can meet the requirements of this provision if it treats premiums and discounts realized on the disposition or maturity of short-term money market instruments as being on account of income.
In our view, the fact that a mutual fund trust may be required to include the amount of a discount or premium in the calculation of its income would not, in and by itself, disqualify the trust from being a mutual fund trust under subsection 132(6) of the Act.
Although this opinion is not binding, we trust our comments are of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate