Felipe is a Dealing Representative who is developing a non$-$registered investment solution for Laryssa. Felipe is debating between res corporations. He wants to recommend an investment that reduces Laryssa's exposure to taxation.

Which feature may influence his recommendation?

Distributions from mutual fund corporations are not taxable to investors.

Mutual fund trusts can only distribute capital gains and Canadian dividends.

Capital losses may be distributed from mutual fund corporations.

Any income received by a mutual fund corporation is distributed in the form of either capital gains or Canadian dividends.