the MIC's total share capital. Shareholders whose MIC holding are held in registered accounts (RRSP, TFSA, etc.) are limited to 10% due to regulations restricting ownership in those capital accounts. 3. At least 50% of a MIC's assets must be residential mortgages, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions. 4. A MIC may invest up to 25% of its assets directly in real estate, but may not develop land or engage in construction. This ceiling on real estate holdings does not include real estate acquired as a result of mortgage default. 5. A MIC is a flow-through investment vehicle, and distributes 100% of its net income to its shareholders. 6. All MIC investments must be in Canada, but a MIC may accept investment capital from outside of Canada. 7. A MIC is a tax-exempt corporation, as its income is instead taxed in the hands of its shareholders. 8. Dividends received with respect to directly held shares, not held within RRSPs or RRIFs, are taxed as interest income in the shareholder's hands. Dividends may be received in the form of cash, or additional shares. 9. MIC shares are qualified RRSP and RRIF investments. 10. 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. 11. A MIC's annual financial statements must be audited. 12. A MIC may employ financial leverage by using debt to partially fund assets. Benefits The following are some benefits associated with investing in a MIC: Syndicated in Canadian real estate from both domestic and foreign investors. High yield. Targeting > 6% Unregulated. Flexible amortization and LTV ratios. Special tax treatment (Income tax act section 130.1 or 130.1(6)(B)) Shares of a MIC will generally be “qualified investments” for deferred income plans including registered retirement savings plans (“RRSPs”), registered retirement income funds (“RRIFs”), tax-free savings accounts (“TFSAs”), deferred profit sharing plans (“DPSPs”), registered education savings plans (“RESPs”) and registered disability savings plans (“RDSPs”) Risks The following are some risks associated with investing in a MIC: Fraud - less likely since a MIC must produce audited financial statements every year. Check out the financial statements and see if the MIC is subject to any lawsuits. Losing MIC status - failing to keep within the Income Tax Act rules would cause the MIC to have