The correspondent asked how to report income attributed to a non-beneficiary settlor under s. 75(2). CRA stated:
Where income is allocated pursuant to subsection 75(2), a T3 information slip must be prepared in respect of the income attributed and issued to the person or persons to which the income is attributed.
All T3 income amounts are entered on the appropriate rows and columns of part A of schedule 9 of the T3 return. A statement showing the amount of income attributed to the person or persons must be submitted with schedule 9. The total of all allocations and designations, including those made to beneficiaries, on line 928 is transferred to part A of line 47 of the T3 Trust Income Tax and Information Return. All allocations and designations are therefore deducted from the trust's income by way of line 47 of the return.
CRA also stated that allocated taxable capital gains are not included in the trust's adjustable taxable income for the purpose of calculating Alternative Minimum Tax.