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The trust must distribute all income. Can the trust distribute shares of stock at a value equal to the cash that would be distributed? If so, how would the vale of the distributed shares be calculated, given they have a capital gain?

Probably not, but it all depends on the language of the trust document. Generally speaking, trusts consist of two separate pools of "value": corpus (the assets of the trust) and income (the money the assets generate). Most trust documents set different requirements and restrictions on the distribution of corpus vs. income. What you (or the trustee if that's not you) can do will be explicitly stated in the trust document. If it isn't, you need to refer to your state's laws on trust administration.

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