5-910748
Dear Sirs:
Re: Paragraph 149(1)(i) of the Income Tax Act (the "Act")
This is in reply to your letter of March 13, 1991 and our telephone conversations concerning the qualification of the 24(1) as a "housing corporation" under paragraph 149(1)(i) of the Income Tax Act (the Act).
24(1)
We have therefore reviewed the documentation to determine whether the 24(1) for purposes of subparagraph 110.1(1)(a)(ii) and paragraph 118.1(1)(c) of the Act, could qualify as a "housing corporation" exempt from tax under paragraph 149(1)(i). Gifts to a housing corporation exempt from tax under paragraph 149(1)(i) of the Act are considered to be charitable gifts.
For the 24(1) to qualify under paragraph 149(1)(i) of the Act the following conditions must be met:
(1) it must be constituted exclusively for the purpose of providing low-cost housing accommodation for the aged and,
(2) no part of the income of the 24(1) can be payable to, or otherwise made available for the personal benefit of, any proprietor, member of shareholder thereof.
We ordinarily look to the enabling documents to determine whether the above conditions have been met. In your case the general objectives as amended 24(1) satisfy the second condition. However, the enabling documents do not satisfy the first condition. To satisfy the first condition we would suggest the inclusion in general objective number 1 of a reference to "low-cost" housing accommodation
We understand you will submit the amended enabling documents for our further review.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch