ADV. ACCT CONNECT STAND ALONE
13th Edition
ISBN: 9781266295744
Author: Hoyle
Publisher: MCG
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Chapter 19, Problem 41P
To determine
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James Albemarle created a trust fund at the beginning of 2016. The income from this fund will go to his son Edward. When Edward reaches the age of 25, the principal of the fund will be conveyed to United Charities of Cleveland. Mr. Albemarle specified that 75 percent of trustee fees are to be paid from principal. Terry Jones, CPA, is the trustee.Prepare all necessary journal entries for the trust to record the following transactions:a. James Albemarle transferred cash of $300,000, stocks worth $200,000, and rental property valued at $150,000 to the trustee of this fund.b. Immediately invested cash of $260,000 in bonds issued by the U.S. government. Commissions of $3,000 are paid on this transaction.c. Incurred permanent repairs of $7,000 so that the property can be rented. Payment is made immediately.d. Received dividends of $4,000. Of this amount, $1,000 had been declared prior to the creation of the trust fund.e. Paid insurance expense of $2,000 on the rental property.f. Received…
James Albemarle created a trust fund at the beginning of 2016. The income from this fund will go to his son Edward. When Edward reaches the age of 25, the principal of the fund will be conveyed to United Charities of Cleveland. Mr. Albemarle specified that 75 percent of trustee fees are to be paid from principal. Terry Jones, CPA, is the trustee.
Prepare all necessary journal entries for the trust to record the following transactions:
James Albemarle transferred cash of $300,000, stocks worth $200,000, and rental property valued at $150,000 to the trustee of this fund.
Immediately invested cash of $260,000 in bonds issued by the U.S. government. Commissions of $3,000 are paid on this transaction.
Incurred permanent repairs of $7,000 so that the property can be rented. Payment is made immediately.
Received dividends of $4,000. Of this amount, $1,000 had been declared prior to the creation of the trust fund.
Paid insurance expense of $2,000 on the rental property.
Received rental income…
Facts
The Flower Family Trust is a discretionary trust created by Graeme Flower (the trustee) in 2012 for the benefit of his children and grandchildren. During the year ended 30 June 2021 the Flower Family Trust has net income of $75,000. The trustee exercises his discretion to allocate $40,000 of the net income to Paula Flower who is 35 years of age and lives in a nursing home after suffering brain damage from a car accident four years ago. The balance of net income is not allocated to any beneficiary.
Question
Advise Graeme Flower of any tax obligations he has as trustee in respect of the net income of the trust for the year ended 30 June 2021.
Chapter 19 Solutions
ADV. ACCT CONNECT STAND ALONE
Ch. 19 - Prob. 1QCh. 19 - Prob. 2QCh. 19 - Prob. 3QCh. 19 - Prob. 4QCh. 19 - Prob. 5QCh. 19 - Prob. 6QCh. 19 - Prob. 7QCh. 19 - Prob. 8QCh. 19 - What claims against an estate have priority?Ch. 19 - Prob. 10Q
Ch. 19 - Prob. 11QCh. 19 - Prob. 12QCh. 19 - Prob. 13QCh. 19 - How is the federal estate tax computed?Ch. 19 - Prob. 15QCh. 19 - Prob. 16QCh. 19 - Prob. 17QCh. 19 - Prob. 18QCh. 19 - Prob. 19QCh. 19 - Prob. 20QCh. 19 - Prob. 21QCh. 19 - Prob. 22QCh. 19 - Prob. 23QCh. 19 - Prob. 24QCh. 19 - Prob. 25QCh. 19 - Prob. 26QCh. 19 - Prob. 27QCh. 19 - Prob. 28QCh. 19 - Prob. 29QCh. 19 - Prob. 30QCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Which of the following is a specific legacy? a....Ch. 19 - Prob. 12PCh. 19 - Prob. 13PCh. 19 - Prob. 14PCh. 19 - Prob. 15PCh. 19 - Prob. 16PCh. 19 - Prob. 17PCh. 19 - Prob. 18PCh. 19 - Prob. 19PCh. 19 - Prob. 20PCh. 19 - Prob. 21PCh. 19 - Prob. 22PCh. 19 - Prob. 23PCh. 19 - Prob. 24PCh. 19 - Prob. 25PCh. 19 - Prob. 26PCh. 19 - Prob. 27PCh. 19 - Prob. 28PCh. 19 - Prob. 29PCh. 19 - Prob. 30PCh. 19 - Prob. 31PCh. 19 - Prob. 32PCh. 19 - Prob. 33PCh. 19 - Prob. 34PCh. 19 - Prob. 35PCh. 19 - Prob. 36PCh. 19 - Prob. 37PCh. 19 - Prob. 38PCh. 19 - Prob. 39PCh. 19 - Prob. 40PCh. 19 - Prob. 41PCh. 19 - Prob. 42PCh. 19 - Prob. 1DYSCh. 19 - Prob. 2DYSCh. 19 - Prob. 3DYSCh. 19 - Prob. 4DYSCh. 19 - Prob. 5DYS
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