I just copied this off Nortel's web site for investors. Thanks to all of you who responded to my original question, now help me interpet this. It sure sounds like my mother will be taxed as if she received cash AND taxed as if NT were valued today as it was in May. Comments please.

U.S. Shareholders:

A BCE shareholder that is a U.S. taxpayer will be required to treat this distribution as a taxable dividend according to U.S. tax laws. The dividend will be equal to the fair market value of the Nortel Networks common shares on May 1, 2000, the effective date of the Arrangement.

U.S. tax laws do not prescribe any specific method for determining fair market value, however, one acceptable alternative is to use the average high and low prices for Nortel Networks common shares on the effective date. Based on information from the New York Stock Exchange, the high and low for a whole Nortel Networks common share on May 1, 2000 were U.S.$120.25 and U.S.$114.50 per share respectively, before taking into account the Nortel Networks 2-for-1 stock split.

Your tax basis for Nortel Networks common shares will also equal this fair market value. No change should be made in the tax basis of your BCE shares.

It should be noted that the above discussion is not binding upon the United States Internal Revenue Service and shareholders (including shareholders who seek to utilize a date other than the effective date of the Arrangement or who have special facts) are urged to consult their own tax advisors.