Principal Issues: Can an entity that qualifies for an exemption from tax under paragraph 149(1)(l) invest in property and later sell the property to its members? Would the property be inventory or capital property?
Position: Unable to answer these questions as it depends on the facts surrounding the transaction. General information about paragraph 149(1)(l) is provided.
Reasons: Whether the transactions described would, in and of themselves, prevent the corporation from qualifying as a paragraph 149(1)(l) entity could only be determined having regard to all the facts. Similarly, the question whether particular properties are held as inventory or capital property depends on the facts.