Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 65-67

1965-1 C.B. 269

Sec. 856

Full Text

Rev. Rul. 65-67

Section 856(c)(3)(B) of the Internal Revenue Code of 1954 provides, in part, that a trust or association shall not be considered a real estate investment trust for any taxable year unless at least 75 percent of its gross income in derived from certain specified sources, including `mortgages on real property.'

Held , mortgages owned by a trust or association, which are held as investments and not for sale to customers in the ordinary course of trade or business, will not fall outside the scope of section 856(c)(3)(B) of the Code merely because such mortgages were originated by the trust or association.

Interest income derived from such obligations will constitute `interest on obligations secured by mortgages' within the meaning of section 856(c)(3)(B) of the Code.