S. 107(2) rather than 118.1 potentially can apply to an estate distribution to a charity

Respecting which of s. 118.1(3) and 107(2) should apply on the distribution of capital property of a testatmentary trust to discretionary capital beneficiaries including charities, CRA stated that this determination should be made based on the "specific wording of the trust agreement and ... whether the intention of the trustee was to have the trust make a distribution to the charity as a donation of capital property of the trust, or in settlement of a capital interest which the charity may have in the trust."  A similar approach is taken in determining whether s. 104(6) or 118.1 applies to an income distribution.

Summaries of 27 January 2014 Memo 2012-0472161I7 under s. 118.1(1) – total charitable gifts, and s. 107(2).