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Many thanks for this response and for that of AJ.

The trust allows for distribution of income only. Principal will be distributed according to the Rule Against Perpetuities. There is no language in the trust that would prohibit distributing stock equal in value to the income received by the trust, nor any that in any way addresses the issue.

There would, of course, be no advantage to distributing stock if the capital gain would first have to be paid by the trust rather than after by the beneficiary.

The trust is a NY trust. I could find nothing by an online search of NY tax trust law. There is no wording in the trust that applies to that question. The lawyer who drew up the trust is deceased. I am trustee of the trust.
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