18 February 1994 External T.I. 9334285 F - Bare Trusts -- summary under Subsection 104(2)

Where a settlor transfers property to a trust having the characteristics according with RC's understanding of a bare trust (the settlor is the sole beneficiary of income and capital during her lifetime, she retains the ability to revoke or amend the trust at any time and has the unfettered ability to deal with the property as she sees fit during her lifetime) but the settlor also stipulates that income and/or capital interest of other beneficiaries, which are contingent during her lifetime, will vest upon her death, the trust will be considered to be a bare trust until her death. Accordingly, she will report all income and losses related to the property and (subject to the availability of any rollover) will have a deemed disposition at fair market value of the property on her death.