Tax treatment of business trust distributions: unit holders taxed in the nature received while the trust faces maximum marginal taxation.

Income distributed by a business trust to unit holders is treated in the hands of the unit holder as of the same nature and proportion as when received or accrued by the trust; the trust's total income is taxed at the maximum marginal rate subject to specified capital gains provisions; distributed amounts that correspond to exempt categories are deemed income of the unit holder in the previous year; payors must furnish prescribed statements to unit holders and the designated authority detailing the nature of income paid.

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