US Trust&Trustee&Grantor, CDN Ben. Capital Gains onl

[sceptre4444]

I am looking for confirmation that the income does flow as I expect. Also , i'm looking for elements that I may have not considered.

A) The situation is this trust was set up as 'Simple trust' as defined by the IRS. Since it's only purpose and mandate is to Short term Invest in US Securities on a US exchange, the information I've gathered states that due to it's limited scope this trust is not actually doing business. Since it's not doing business, the income is not effectively connected.

B) The Non Resident Alien Cdn Beneficiary, I'm told is effectively connected to the Trust. I gather this means he is also not receiving income that is effectively connected. (Dividends & Interest excluded)

C) I researched that the Ben. still must submit a US personal tax return, though with no links or other US income, this is submission of 0.
[b]Question 1 is an Itin still required?[/b]

D) I understand this income normally would have tax witheld. By using the W8 form, this can be avoided.
[b]Question 2, who receives the W8 Ben, the US trustee, or the US Broker?[/b][b]Question 3, on the application for ITIN, there is a question/trustee regarding if the purpose is for Canadian Tax Treaty, but really the reason is so that the Ben. can report the distribution from the Trust. Which is the Accurate choice?[/b]

E) Mapping, I feel the income on teh Ben's US tax return is mappable over to the Canadian return. I've heard from CRA this could be either 'other income' or 'capital gains' the implication if it was mapped as Captial gains, then it could be used against earlier losses incurred by the Ben. (cdn losses) [b]Correct? or is it 'other income'.[/b]

F) Lastly, What are the chances that there is a rule out there that this trust must be treated as a Grantor trust (taxing the US Grantor) on this simple Irrevocable, Trust.[b] If so where can I get info on that?[/b]

THanks for your opinions.