4 February 1992 External T.I. 7-901929 - Tax Window, No. 16, p. 5, ¶1728

S.107(2.1) acts in concert with s. 52(6) to ensure that distributions of income and taxable capital gains retain their identity as income for tax purposes.

Where at the time a taxpayer acquires a unit in a unit trust the value of the unit includes income payable by the trust at year-end and realized capital gains, on a subsequent redemption of the units s. 52(6) will attribute a cost to the right to receive the income and capital gains equal to the amount received in satisfaction of that right, and no gain or loss will arise.