In Barwicz v R, 2024 CCI 93, the Tax Court held that a beneficiary of a trust was liable under section 160 for its unpaid tax to the extent of capital distributions received from the trust. Subsection 107(2), which provides that a beneficiary is deemed to dispose of his capital interest at the same cost as the trust property distributed, did not deem the beneficiary to have paid fair market value consideration for the property for the purposes of section 160. Summarized in Tax Topics no 2717 (November 5, 2024) at 11.
