Lanesborough REIT is issuing units in satisfaction of a dry income distribution

Lanesborough REIT used all of the net cash proceeds from the sale of a property to pay down debt. Although it has some operating losses, it nonetheless needs to make a special distribution in order to distribute its resulting taxable income. It will do this by making a special distribution to its unitholders on December 31, payable in treasury units, with the number of outstanding units then immediately consolidated to the same number as before. It appears to be contemplated that a s. 104(21) designation will be made in order to flow out capital gains treatment to the unitholders, so that the special distribution will be twice the taxable income to be distributed.

Neal Armstrong. Summary of Lanesborough REIT Press Release under Spin-Offs & Distributions – Taxable dividends-in-kind – MFT dry income distributions.