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Ana creates an irrevocable trust funding it with $400,000 worth of securities. By the terms of the trust. Ana must receive all the income from the trust on basis on her death the remainder is to pass to her two children in equal shares. The value of Ana's life income interest is: 1. determined by backing out the actuarial value of the remainder interest from the fair market value of the trust property as a whole. 2. determined by computing the present value of the life income interest. 3.50. 4.$400,000 01 02 09

Ana creates an irrevocable trust funding it with $400,000 worth of securities. By the terms of the trust. Ana must receive all the income from the trust on basis on her death the remainder is to pass to her two children in equal shares. The value of Ana's life income interest is: 1. determined by backing out the actuarial value of the remainder interest from the fair market value of the trust property as a whole. 2. determined by computing the present value of the life income interest. 3.50. 4.$400,000 01 02 09

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ana creates an irrevocable trust, funding it with $400,000 worth of securities. By the terms of the trust. Ana must receive all the income from the trust on an annual basis: on her death the remainder is to pass to her two children in equal shares. The value of Ana's life income interest is: 1. determined by backing out the actuarial value of the remainder interest from the fair market value of the trust property as a whole. 2. determined by computing the present value of the life income interest. 3.50 4.$400,000 öööö 01 02 04
Transcribed Image Text:Ana creates an irrevocable trust, funding it with $400,000 worth of securities. By the terms of the trust. Ana must receive all the income from the trust on an annual basis: on her death the remainder is to pass to her two children in equal shares. The value of Ana's life income interest is: 1. determined by backing out the actuarial value of the remainder interest from the fair market value of the trust property as a whole. 2. determined by computing the present value of the life income interest. 3.50 4.$400,000 öööö 01 02 04
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