1. John transfers investment securities worth $200,000 with a tax basis of $130,000 to a trust, naming himself as trustee. The terms of the trust agreement require the trustee to pay all dividends and

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1. John transfers investment securities worth $200,000 with a tax basis of $130,000 to a trust, naming himself as trustee. The terms of the trust agreement require the trustee to pay all dividends and interest to John’s brother, Dale. John has the right to revoke the trust at any time and take back title to the securities. During the trust’s first year, John, as trustee, distributes $20,000 in dividends and $10,000 interest from the securities to Dale. None of the income was tax exempt. In a Word Document, respond to the following questions using 2016 tax regulations:

a) How much gross income does Dale recognize from the payments? Show your calculations. b) How much gross income does John recognize from the above? Show your calculations.

2. On January 15 of the current year, Joyce, age 24, receives stock worth $28,000 as a gift from her parents. Her parents jointly purchased the stock six years ago for $12,000. During the year, Joyce receives $2,100 dividend income on the stock. In December, she sells the stock for $39,000. In a Word Document, respond to the following questions using 2016 tax regulations: a) Assuming this is Joyce’s only income for the year, and her parents are in the 33 percent marginal tax bracket, how much income tax does the family save as a result of this gift? Show your calculations. b) Are there any transfer taxes as a result of this gift? Explain. Show your calculations. Review the applicable tax publications and forms and respond in a Word Document to the Unit 4: Final Dropbox. View the rubric below for grading details.

1. John transfers investment securities worth $200,000 with a tax basis of $130,000 to a trust, naming himself as trustee. The terms of the trust agreement require the trustee to pay all dividends and
AC561 : Taxation of Estates and Trusts Unit 4 Final Part 1 Unit 4 Final Part 1 : Details and Rubric The final will assess your understanding of the following course outcome below: AC561 -4: Analyze wealth transfer tax consequences. For the first part of the final project, you will review the tax publications for gifts, estates, and trusts, and respond to the questions below. Use question numbers to clearly organize your responses. 1. John transfers investment securities worth $200,000 with a tax basis of $130,000 to a trust, naming himself as trustee. The ter ms of the trust agreement require the trustee to pay all dividends and interest to John’s brother, Dale. John has the right to revoke the trust at any time and take back title to the securities. During the trust’s first year, John, as trustee, distributes $20,000 in dividends and $10,000 interest from the securities to Dale. None of the income was tax exempt. In a Word Document, respond to the following questions using 2016 tax regulations: a) How much gross income does Dale recognize from the payments? Sh ow your calculations. b) How much gross income does John recognize from the above? Show your calculations. 2. On January 15 of the current year, Joyce, age 24, receives stock worth $28,000 as a gift from her parents. Her parents jointly purchased the stock six years ago for $12,000. During the year, Joyce receives $2,100 dividend income on the stock. In December, she sells the stock for $39,000. In a Word Document, respond to the following questions using 2016 tax regulations: a) Assuming this is Joyc e’s only income for the year, and her parents are in the 33 percent marginal tax bracket, how much income tax does the family save as a result of this gift? Show your calculations. b) Are there any transfer taxes as a result of this gift? Explain. Show you r calculations. Review the applicable tax publications and forms and respond in a Word Document to the Unit 4: Final Dropbox. View the rubric below for grading details. Final Submission Requirements: Response s must adhere to the following formatting guidelines: Microsoft Word document or appropriate reporting application specified in the assignment , double spacing, 12 -point Times New Roman or Arial font, one -inch margins, APA in -text citat ions and an APA reference list for qualitative resp onses. Show work for all questions that require computations. Important Note: Re sponses to assignments should be the original work of the student. Responses must adhere to the University’s academic integrity requirements. Unit 4 Final Part 1 : 12 0 points Assignment Criteria Points Possible Points Earned Content and Focus Includes the main elements, computations, and the question requirements (30pts per question). 60 AC561 : Taxation of Estates and Trusts Unit 4 Final Part 1 Analysis and Critical Thinking Provides an excellent in -depth analysis that demonstrates a complete understanding of tax concepts; all related tax concepts are correctly applied (20pts per question). 40 Organization and Presentation Demonstrates excellent college -level organization and style for tax accounting reporting; presents work in Microsoft Word, showing all necessary formulas, computations, and steps whenever applicable (10pts per question). 20 Total for Assignment 12 0

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