Editing Income trust (section)

{{short description|Specialized type of trust}}
An '''income trust''' is an investment that may hold equities, debt instruments, royalty interests or real properties. It is especially useful for financial requirements of [[institutional investor]]s such as [[pension fund]]s,<ref>[http://www.investordictionary.com/definition/income-trust ''Investment Dictionary'']</ref> and for investors such as retired individuals seeking yield. The main attraction of income trusts, in addition to certain tax preferences for some investors, is their stated goal of paying out consistent [[cash flow]]s for investors, which is especially attractive when cash [[interest rate|yield]]s on [[bond (finance)|bond]]s are low. Many investors are attracted by the fact that income trusts are not allowed to make forays into unrelated businesses; if a trust is in the oil and gas business, it cannot buy casinos or motion picture studios.

The names ''income trust'' and ''[[income fund]]'' are sometimes used interchangeably even though most trusts have a narrower scope than funds. Income trusts are most commonly seen in [[Canada]]. The closest analogue in the [[United States]] to the business and royalty trusts would be the [[master limited partnership]]. The trust can receive interest, royalty or lease payments from an operating entity carrying on a business, as well as dividends and a [[return of capital]].<ref>{{cite web|url=http://www.fin.gc.ca/activty/pubs/toirplf_1e.html|title=Canadian Department of Finance|publisher=Canadian Department of Finance|archive-url=https://web.archive.org/web/20051125092612/http://www.fin.gc.ca/activty/pubs/toirplf_1e.html|archive-date=November 25, 2005|url-status=dead}}</ref>