Pepa Madrigal has operated a very successful bakery for 30years, and has accumalated investment that earn annual interest income of $40,000.Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio'sonly personal tax credit is the perssonal tax credit.Determine the maount of federal incometaxes that could be saved by transfering the interest earning investments to a trust with Antonio as the income beneficiary,assuming that the trust will be required todistribute all of its income each year.
Pepa Madrigal has operated a very successful bakery for 30years, and has accumalated investment that earn annual interest income of $40,000.Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio'sonly personal tax credit is the perssonal tax credit.Determine the maount of federal incometaxes that could be saved by transfering the interest earning investments to a trust with Antonio as the income beneficiary,assuming that the trust will be required todistribute all of its income each year.
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 84IIP
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Pepa Madrigal has operated a very successful bakery for 30years, and has accumalated investment that earn annual interest income of $40,000.Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio'sonly personal tax credit is the perssonal tax credit.Determine the maount of federal incometaxes that could be saved by transfering the interest earning investments to a trust with Antonio as the income beneficiary,assuming that the trust will be required todistribute all of its income each year.
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