On January 1, 2020, Jeanine Dorset Acquires 1,700 Units of Blackwell

Essay

On January 1, 2020, Jeanine Dorset acquires 1,700 units of Blackwell Income Trust at $37 per unit, a total cost of $62,900. During 2020, the trust distributes $2.75 per unit, $0.85 of which is a return of capital and $1.90 of which is a property income distribution. Jeanine has asked the trust to reinvest all distributions. The $2.75 per unit distribution was reinvested at a cost of $32 per additional unit. What are the tax consequences to Jeanine of the 2020 distribution and its reinvestment? What will be her adjusted cost base per unit after the reinvestment?