On January 2, 2018, Hank Brady establishesthe Judge Hank Brady Irrevocable DynastyTrust with Tenleytown Trust Company astrustee. The trustee has the discretion todistribute principal and income to Hank'sson, Mike, and his children, Greg, Marcia,Jan, Peter, Cindy and Bobby to provide fortheir welfare. Upon Mike's death, theremainder is distributed in equal shares toMike's children. On January 1O, 2018, Hanktransfers 100 shares of Brady, Inc. to thetrust worth $1 million. Hank allocates$500,000 of his GST exemption to thetransfer on his 2018 form 709.A. On January 3, 2019, the trust makes a$10,000 distribution to Greg. On January 3,2019 the fair market value of the trust is $1.5million. Calculate any GST tax owed as aresult of the distribution. Who is responsiblefor paying the tax? Discuss the inclusionratio and applicable rate.B. On January 3, 2020, the Mike dies. OnJanuary 3, 2020 the fair market value of thetrust is $2 million. Calculate any GST taxowed as a result of Mike's death. Who isresponsible for paying the tax? Discuss theinclusion ratio and applicable rate.

Shares - Equity ownership in a corporation is represented by shares. Shares are a type of financial…

On January 2, 2018, Hank Brady establish the Judge Hank Brady Irrevocable Dynas Trust with Tenleytown Trust Company as trustee. The trustee has the discretion to distribute principal and income to Hank's son, Mike, and his children, Greg, Marcia, Jan, Peter, Cindy and Bobby to provide fo

On January 2, 2018, Hank Brady establish the Judge Hank Brady Irrevocable Dynas Trust with Tenleytown Trust Company as trustee. The trustee has the discretion to distribute principal and income to Hank's son, Mike, and his children, Greg, Marcia, Jan, Peter, Cindy and Bobby to provide fo

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A-7
In 2010, A created two (2) trusts for his daughter, B. During the year, the two trusts earned net income as follows: Trust 1 P 4,000,000 Trust 2 P 6,000,000 Each of the trust filed their own income tax return and paid the corresponding income tax due as computed in their separate returns. How much is the consolidated tax due of the Trust?
Determine Tax Payable for Trust under CANADIAN TAX LAW.
Vshnu
27. G transferred $20,000,000 to Trust T. Trust T was an irrevocable trust which provided for income to individual I (G's friend) for 10 years, and the remainder to a qualified charity ("QC"). Assume the present value of the income interest was $5,000,000 at the time of the transfer, and the value of the trust (remainder interest) that eventually passed to I was $17,000,000. What is the amount of G's taxable gift? a. $0b. $3,000,000c. $5,000,000d. $20,000,000e. None of a-d is correct
At the time of her death on September 4, Alicia held the following assets: Fair Market Value Bonds of Emerald Tool Corporation $900,000 Stock in Drab Corporation 1,100,000 Insurance policy (face amount of $400,000) on the life of her brother, Mitch 80,000* Roth IRAs $300,000 *Cash surrender value. Alicia also held a lifetime income interest in a trust (fair market value of trust assets $2,000,000) created by her late spouse Bert. (The executor of Bert's estate did not make a QTIP election.) In October, Alicia's estate received an interest payment of $11,500 ($6,000 accrued before September 4) paid by Emerald and a cash dividend of $9,000 from Drab. The Drab dividend was declared on August 19 and was payable to date of record shareholders on September 5. Although Mitch initially survives Alicia, she is the designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children. Mitch is killed by a rock slide while mountain climbing in…
KC and Jojo are considering formed a partnership whereby profits will be allocated through the use of salaries, interest and bonuses. The following are their capital balances for the current year, 2019: KC, Capital Jojo, Capital 1-Jan -35,000 -25,000 1-Mar -10,000 1-Jun -10,000 1-Sep 10,000 1-Oct -5,000 1-Nov 5,000 1-Dec -8,000 It was agreed that a bonus of 10% of partnership profits after bonus is credited to KC. Further a salary of P35,000 and P20,000 is allocated to Jojo and KC, respectively; a 10% interest on weighted capital is allocated; and remainder is equally divided. The profit for the year amounted to P65,191. How much is the profit distribution to KC and Jojo, respectively? (Round off to nearest peso) P29,671 / P36,520 P29,967 / P36,224 P29,159/ P32,032 P29,455 / P35,736
Diego is a single individual who owns a life insurance policy worth $1.54 million that will be worth $8 million upon his death. This year Diego transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to Diego's two children for 15 years and then distributes the corpus to the children in equal shares. Assume that Diego has made only one prior taxable gift of $12 million in January of 2018. (Refer to Exhibit 25-1 and Exhibit 25-2.) Required: a. Calculate the amount of gift tax due (if any) on the transfer of the insurance policy. b. Diego died unexpectedly this year after transferring the policy. At the time of death, Diego's probate estate was $25 million, to be divided in equal shares between Diego's two children. Calculate the amount of cumulative taxable transfers for estate tax purposes. Note: For all requirements, enter your answers in dollars and not in millions of dollars. a. Amount of gift tax b. Amount of cumulative taxable…
Browne and Red, both C corporations, formed the BR Partnership on January 1, 2020. Neither Browne nor Red is a personal service corporation, and BR is not a tax shelter. BRs gross receipts were $22 million, $28 million, $34 million, and $36 million, respectively, for the next four tax years. what are the methods of accounting available to BR in each tax year. 2020 2021 2022 2023
Maribel Munroe created a nongrantor trust in 2017. During 2021, the trust earned $4,000 in ordinary dividends, $1,600 in interest income, and $2,400 in tax-exempt municipal bond interest. The only expenses were $1,800 in fiduciary fees. What portion of the fiduciary fees is deductible? None of the fiduciary fees are deductible. $540 is deductible..
In the current year K gifted shares of a public corporation to his spouse. The shares, that originally cost $15,000, had a value of $20,000 at the time of the gift. During the year, K's spouse received an eligible dividend of $600 from the public corporation. What amount, if any, is included in K's net income for tax purposes in the current year?
Eugene and Alfred are partners in their Ghost Fighting business. Alfred is the managing partner. As of December 2020, their capital account showed the following: Eugene Capital Dr. 1-Jul 45,000 Dr. 1-Dec 30,000 Cr. Jan. 1- 300,000 Cr. Nov. - 105,000 Cr. Apr. - 30,000 1-Jan Alfred Capital Dr. 1-Apr 90000 Cr. Jan - 450000 Dr. 1-Dec - 105000 Cr. Jun - 150000 Cr. oct.- 195000 CASE I: Assuming the partnership earned a net profit of P360,000. CASE II: Assuming the partnership incurred a net loss of P68,000 Required: On your answer sheet (yellow pad), using the following agreements, distribute the profit and losses in Case I & II to Eugene & Alfred. Make a journal entry after your computation. 1) Equally 2) 2:4 ratio to Eugene and Alfred, respectively 3) 60% 40% ratio respectively