Subsection 122(1) - Tax payable by inter vivos trust
Administrative Policy
9 March 1993 Memorandum (Tax Window, No. 29, p. 10, ΒΆ2453)
Where the residuary beneficiaries of a non-spousal testamentary trust that provides for the distribution to a third beneficiary of all the proceeds of an RRSP of the deceased reimburse the estate for all tax paid as a result of the inclusion in the deceased's terminal return of the RRSP proceeds, and no election is made under s. 104(13.1) or (13.2), the trust will lose its status as a testamentary trust for the taxation year in which the contribution is made.
Subsection 122(2) - Where subsection (1) does not apply
Cases
The Queen v. Robinson, 98 DTC 6065 (FCA)
An inter vivos trust that otherwise would have been grandfathered was found to be carrying on an active business in the year by virtue of being a limited partner of a Manitoba limited partnership.