A non-resident inter vivos trust distributes its shares of a private Canadian real estate corporation (Canco) in satisfaction of the capital interest of its sole non-resident benficiary. S. 107(2.1) rather than (2) applied:
[S]ubsection 107(2) is not applicable in this case because the shares of Canco would not qualify as property described in any of subparagraphs 128.1(4)(b)(i) to (iii). The conclusion that the Canco shares might qualify as "Canadian real, immovable or resource property" is not relevant for the application of subsections 107(2), 107(2.1) and 107(5), as this expression is not used under those provisions.