None of the distributions will be a taxable income. It will be what is know as tax deferred , a return of capital.
The trust will not recover all its losses
So your 50% discount will still apply.
The way it works is the distribution will reduce your cost base( price you paid for the shares). Once the distributions(capital returns)exceed the cost of your shares the excess will be a capital gain . That gain ( if you have held the shares for more than 1 year) will get the 50% discount.
So in summary no need to sell to get your discount.
Hope this helps. Don't loose some of your return because of a misunderstanding of the tax laws.
MXQ Price at posting:
37.5¢ Sentiment: Hold Disclosure: Held
