| 24(1) | 5-902451 |
| A. Seidel | |
| (613) 957-8960 |
19(1)
November 2, 1990
Dear Sirs:
This is in reply to your letter dated September 11, 1990 with respect to mortgage investment corporations ("MIC") and the provisions of section 130.1 of the Income Tax Act (the "Act").
We confirm that the general views expressed in our letter dated April 29, 1983 continue to represent Revenue Canada's interpretation of the provisions of section 130.1 of the Act. As an additional comment with respect to questions 7. and 8., we would point out that paragraph 130.1(6)(b) of the Act requires that a MIC's only, undertaking be the investing of funds of the corporation and specifically precludes the managing or developing any real property.
With respect to the additional enquiry in your September 11, 1990 letter, a MIC is required to satisfy the requirements of subsection 130.1(6) "throughout the year". Therefore, for the purposes of subparagraph 130.1(6)(f)(i), regardless of whether a mortgage is provided during construction or subsequent to the completion of a housing project, the only mortgages that qualify are those that are secured on residential property.
While we hope our comments are of assistance to you they do not constitute an advance income tax ruling and therefore are not binding on the Department in respect of a specific situation.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate