Requires updating to reflect the current Income Tax Act and the growth of MICs that trade on the TSX.
Shares of a MIC are qualified investments under the Income Tax Act (Canada) for RDSPs, RRSPs, RRIFs, TFSAs, or RESPs.
Some MIC shares are designed to be held for a period as short as a year, and other MIC shares require the investor to hold them for a longer period, up to 10 years in some cases.
Shareholders whose MIC holding are held in registered accounts (RRSP, TFSA, etc.)
A MIC may invest up to 25% of its assets directly in real estate, but may not develop land or engage in construction.
A MIC is a flow-through investment vehicle, and distributes 100% of its net income to its shareholders.
A MIC is a tax-exempt corporation, as its income is instead taxed in the hands of its shareholders.
A MIC may distribute income dividends, typically interest from mortgages and revenue from property holdings, as well as capital gain dividends, typically from the disposition of its real estate investments.
A MIC may employ financial leverage by using debt to partially fund assets.