The Castle Group, Inc. CORRESP Correspondence with SEC

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November 22, 2016

Via E-Mail to BonillaJ@SEC.GOV

Ms. Kristi Marrone

Staff Accountant, Office of Real Estate and Commodities

United States Securities and Exchange Commission

Washington, D.C. 20549

Re:

The Castle Group, Inc.

Form 10-K for the year ended December 31, 2015

Filed March 30, 2016

File No. 000-23338

Dear Ms. Marrone:

We are in receipt of your letter dated November 4, 2016 regarding the above filing and have responded to each of

your inquiries below.

Investment in Limited Liability Company, page 22

We note that investment income from your equity method investment exceeds 20% of your pretax income for each of the periods presented. Please tell us how you considered the disclosure requirements of Rule 8-03(b)(3) of Regulation S-X.

The Company has a 7% ownership interest in the Limited Liability Company, and this ownership interest is 4% of

the Company’s total assets. The income received from our investment for the periods in question were not normal

operating years for the LLC in that the income allocation from the equity method investment was higher as a

percentage of consolidated net income during 2014 and 2015 than will normally be expected in future years. We

do not anticipate that the amount of income from this investment exceeding 20% of our pretax income to be

continuing wherein we would be reporting the operating income of our investment for infrequent years and not

reporting the same for most years which may confuse readers of our reports. However, we shall report this

information on a prospective basis and should the commission desire so, we will certainly go back and amend the

above filing.

Note 6. Long Term Debt, page 25

We note your disclosure on pages 9 and 25 that you have imputed interest since 2013 on the New Zealand note payable issued for the acquisition of the Podium property, and the interest expense is offset with an increase in additional paid in capital. Please tell us your basis for not imputing interest prior to January 1, 2013, and how you considered ASC 835-30. Also, tell us why the balance of the Real estate-Podium as disclosed on page 19 decreased during 2015.

On December 31, 2012, the New Zealand note payable was refinanced with the holder and that refinance

agreement did not provide for interest on the note which required us to record imputed interest expense and an

offsetting increase in additional paid in capital. Prior to January 1, 2013, the New Zealand note payable did

provide for interest, wherein the note called for monthly payments of NZ$40,000, of which NZ$20,000

represented interest.

Ms. Kristi Marrone

United States Securities and Exchange Commission

November 15, 2016

Page 2

This is described in Note 6. Long Term Debt, page 25 in our 10K filing for the fiscal year ended December 31,

2012 as follows:

Note dated 12/31/04, payable in New Zealand, with an original face value of $8.6 million and secured by real estate in New Zealand and a general security agreement including an assignment of $3.018 million of the note receivable due from HBII. The Company acts as a guarantor for the payment of the assigned receivable, and therefore, the obligation undertaken as a guarantor is included in this amount. The guarantor obligation is referred to as “Other long term obligations” on the Balance Sheet (See Note 4). The note calls for payments of NZ $40,000 (US $32,784) per month, one half of which represents interest. The note also calls for monthly interest payments to a NZ bank for a loan in favor of Mocles at the bank’s prime rate plus 2%.

Therefore, for the years prior to fiscal year 2013, the Company did not impute interest expense as the NZ note

payable did provide for the payment of interest on the note.

As for the decrease in the value of the real estate-Podium as disclosed on page 19, this is due to the weakening of

the NZ Dollar compared to the US Dollar. We translate the assets and liabilities for our New Zealand operations

based on the spot exchange rate as of the date of the financial statements. At December 31, 2015, the exchange

rate was .6844 and at December 31, 2014, the exchange rate was .7807.

12/31/15

12/31/14

Podium, NZ Dollars

10,367,006

Exchange rate to convert to US Dollars

.6844

.7807

Podium, US Dollars

7,095,179

8,093,522

The net exchange rate differences when translating the assets and liabilities from New Zealand Dollars to US

Dollars as presented in our financial statements are shown on our Statement of Operations under the line item

“Other Comprehensive Income-Foreign currency translation adjustment”, and also in our Stockholders’ Equity

section of our Balance Sheet under the line item “Accumulated other comprehensive income”.

We acknowledge that:

• the company is responsible for the adequacy and accuracy of the disclosure in the filing;

• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from

taking any action with respect to the filing; and

• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any

person under the federal securities laws of the United States.

Sincerely,

/s/ Rick Wall

Rick Wall

Chief Executive Officer

The Castle Group, Inc.

The Castle Group, Inc. (CAGU) CORRESPCorrespondence with SEC