Calculate any tax payable, Taxation

Assignment Help:

The will of B Dark, who died on 31 March of the previous income year, provides that after payments of debts and legacies the residue of the estate is to be held in trust and the income applied as follows:

  • an annuity of $11,000 to be paid to the widow on 1 June each year. If in any year the income is insufficient to meet the annuity, the deficiency is to be met out of the capital of the estate;
  • the remaining income to be accumulated and distributed to such of the children as attain the age of 25 years;
  • at the discretion of the trustees, to be exercised as they think fit, payments may be made for the maintenance, education and advancement of the children, such payments to be made out of the share of income to which each child is contingently entitled while under the age of 25 years. There are two children of the deceased: Maxine, aged 12 and a full-time student, and Judy, who is married and aged 22. The deceased was a solicitor whose taxable income has always been calculated on a cash basis.

 

The following is a summary of the trustee's cash receipts and payments for the two income years ended 30 June this year:

Year ended 30 June last year                                       $          

Receipts Net rental income                                       1,200

Interest                                                                  2,600

Professional fees (outstanding at death)                    8,000

Payments Annuity paid to widow                              11,000

Year ended 30 June this year

Receipts

Net rental income                                                 45,400

Interest                                                               43,600

Payments

Annuity to widow                                                  11,000

Payments for the maintenance of Judy                    6,800

Payments for maintenance of Maxine                      9,300

Blocks of flats purchased in joint names of

Maxine and Judy                                                  40,000

The professional fees outstanding were collected within two weeks of the deceased's death. The remaining income was accumulated as directed. Indicate how the payments made by the trustee and the amounts accumulated would be assessed in respect of each of the two years, assuming the beneficiaries have no other income. Calculate any tax payable and indicate who is liable for payment of the tax.


Related Discussions:- Calculate any tax payable

Income tax, income tax and its many types

income tax and its many types

Collective investment fund, A fund that is managed by a trust company or a ...

A fund that is managed by a trust company or a bank and deals with pooled collection of trust accounts. Collective investment funds combine together the assets of several individua

Qualified residence interest, Several years ago, Magdelena purchased a new ...

Several years ago, Magdelena purchased a new residence for $300,000. Currently, the outstanding mortgage on the residence is $260,000. The current fair value of the home is $330,00

#81, Joe operates a business that locates and purchases specialized assets ...

Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn’t keep any signifi

Inherentance., Where do I file a person''s life insurance and what they hav...

Where do I file a person''s life insurance and what they have inherited.

How to find...., How do I find the original price of an item after the tax ...

How do I find the original price of an item after the tax was placed?

Salary., introduction to income of salary

introduction to income of salary

Real Estate Taxation - 1031 Like-Kind Exchange, The taxpayer exchanges prop...

The taxpayer exchanges property in 2010 with a fair market value of $5,500,000 that has a basis of $750,000. The property is also subject to a mortgage of $2,500,000. The taxpaye

Tax liability calculation, The XYZ Corporation has total earnings of $20 mi...

The XYZ Corporation has total earnings of $20 million and decides to pay its stockholders a dividend of $8 million. If the corporate tax rate is 30% and the personal tax rate on in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd