How and when are Magenta’s profits distributed to shareholders?
The Income Tax Act requires that 100% of a MIC’s net income be distributed annually to shareholders in the form of a dividend. The dividend is taxed as interest income, in that it essentially represents a flow through of mortgage interest income. Magenta and Magenta II’s fiscal year end is May 31st. Dividends are declared and paid at the conclusion of the annual audit, which is usually completed by late July. All shareholders, regardless of how their shares are held, have the option of receiving their dividends in cash, in the form of additional shares, or in some combination thereof. Cash dividends are paid at the conclusion of the annual audit. Stock dividends are credited as at June 1 st , meaning that the shares fully participate with respect to dividends for the entire fiscal year commencing on that date.
