The TSO indicated that the taxpayer had increased that ACB of the taxpayer’s units by the non-taxable portion of capital gains realized on share investments that had not been distributed. The Directorate concluded that what likely had instead happened was that the capital gains had been payable by the MFT and reinvested in additional units (perhaps with a consolidation of the units). Before so concluding, and in addressing the misguided query, it stated:
[T]he designation by an MFT to a taxpayer of a capital gain that has become payable does not increase or decrease the ACB of the taxpayer's unit in the MFT.