Clarification was requested on the application to a trust of (b)(i)(A) of the definition of “equity amount:”
(A) the average of all amounts each of which is the total amount of all equity contributions to the trust made before a calendar month that ends in the year, to the extent that the contributions were made by a specified non-resident beneficiary of the trust,
CRA stated:
[F]or each of the calendar months that end in the relevant taxation year, the trust would calculate the total contributions to the trust (by the specified non-resident beneficiary) from the trust’s creation to immediately before that calendar month. The trust would then calculate the average of these monthly totals.
Using the example of a calendar 2015 taxation year, this means calculating the total contributions for each of the twelve months of 2015 (i.e., the twelve calendar months that end in the year). For each of those months, the total contributions from a specified non-resident beneficiary from the creation of the trust until the end of the calendar month immediately prior to the calendar month in question would be used. Therefore, for January 2015, the total contributions would be calculated from the creation of the trust until the end of December 2014. For February 2015, it would be the contributions from the creation of the trust until the end of January 2015, and so on. The average of the twelve totals would then be calculated.