This year Jim created an irrevocable trust to provide for Ted, his 32-year-old nephew, and Ted's family. Jim transferred $73,000 to the trust and named a bank as the trustee. The trust was directed to pay income to Ted until he reaches age 35, and at that time the trust is to be terminated and the corpus is to be distributed to Ted's two children (or their estates). Determine the amount, if any, of the current gift and the taxable gift. If necessary, you may assume the relevant interest rate is 7 percent and Jim is unmarried. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Amount of current gift Amount of taxable gift
This year Jim created an irrevocable trust to provide for Ted, his 32-year-old nephew, and Ted's family. Jim transferred $73,000 to the trust and named a bank as the trustee. The trust was directed to pay income to Ted until he reaches age 35, and at that time the trust is to be terminated and the corpus is to be distributed to Ted's two children (or their estates). Determine the amount, if any, of the current gift and the taxable gift. If necessary, you may assume the relevant interest rate is 7 percent and Jim is unmarried. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Amount of current gift Amount of taxable gift
Chapter19: Family Tax Planning
Section: Chapter Questions
Problem 16CE
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Transcribed Image Text:This year Jim created an irrevocable trust to provide for Ted, his 32-year-old nephew, and Ted's family. Jim transferred
$73,000 to the trust and named a bank as the trustee. The trust was directed to pay income to Ted until he reaches age
35, and at that time the trust is to be terminated and the corpus is to be distributed to Ted's two children (or their
estates).
Determine the amount, if any, of the current gift and the taxable gift. If necessary, you may assume the relevant interest
rate is 7 percent and Jim is unmarried.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.
Amount of current gift
Amount of taxable gift
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