Spray provision is included in the trust instrument

Assignment Help Financial Management
Reference no: EM131310183

A grantor transfers $1 million to an irrevocable trust naming his three children as beneficiaries. A bank is the trustee and a spray provision is included in the trust instrument. What are the consequences of this transfer?

a. The grantor can take an annual exclusion for each trust beneficiary to reduce the taxable portion of the gift to $958,000

b. If the bank distributes $20,000 to one trust beneficiary this year, the grantor can take an annual exclusion of $14,000

c. The bank can make discretionary distributions of both income and corpus to the trust beneficiaries

d. The bank can only make discretionary distributions of income to the trust beneficiaries

Reference no: EM131310183

Questions Cloud

How often age discrimination claims are filed : Find and analyze any statistics on how often age discrimination claims are filed. In addition, should the laws be changed to cover age discrimination against people younger than 40 years of age
Describe a reference validation mechanism. : Use the Common Criteria to write security requirements for identifying the security functional and assurance requirements that define a security policy that implements the Bell-LaPadula Model.
What kinds of options is bruce proposing : What kinds of options is Bruce proposing? How much would the options be worth? Would the equity-linked and bear-market deposits generate positive NPV for Gibb River Bank?
How was the team brought back together : Briefly describe a time when you were part of a dysfunctional team. Why was it dysfunctional? Give specific examples. How was the team brought back together
Spray provision is included in the trust instrument : A grantor transfers $1 million to an irrevocable trust naming his three children as beneficiaries. A bank is the trustee and a spray provision is included in the trust instrument. What are the consequences of this transfer?
Discuss about the kirkpatricks taxonomy model : Discuss about the Kirkpatricks Taxonomy Model.Read the article "Apple is Beta-testing an Update that Kills Evasion Jailbreak." In the textbook, beta-testing is described as used for formative evaluation and for fine-tuning. How does the story of A..
Briefly describe three different team activities : Briefly describe three different team activities that you have experienced or observed on a team that increased team effectiveness. Explain the impact of these activities on the team
Benefits of methodology for handling criteria creep : This issue is not confined to the TCSEC, but rather is a problem universal to all evaluation technologies. Discuss the benefits and drawbacks of the CC methodology for handling criteria creep.
What is ibm preferred stocks beta with respect to market : Suppose that you own IBM preferred stock that pays an annual, fixed, and perpetual dividend of $10 which is worth $100 per share. The market return is 12% and the risk-free rate is 4%. What is IBM preferred stock's beta with respect to the market?

Reviews

Write a Review

Financial Management Questions & Answers

  Analyse the current financial state of anthonys orchard

Analyse the current financial state of Anthony's Orchard and evaluate the impact of a major customer cancelling their expected order.

  Make semiannual payments-what is the current bond price

App Store Co. issued 15-year bonds one year ago at a coupon rate of 7.1 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.4 percent, what is the current bond price?

  Based on the dividend growth model

Based on the dividend growth model, why might a company be hesitant to reduce its dividend growth rate? Certain industries such as utilities are known for generally high dividend payout ratios, whereas other industries exhibit generally low or no div..

  Some practice working with financial concepts

Second Project The purpose of this project is for you to have some practice working with financial concepts in the real world. This will involve integrating some material from throughout the course. The project will also involve the development of yo..

  What items are most critical in decision making process

Would you offer to purchase this business? If so, how much do you feel this business is worth?- What items are most critical in your decision making process? Why?

  Stock is expected to pay a constant dividend in perpetuity

The market price of a security is $36. Its expected rate of return is 11%. The risk-free rate is 4%, and the market risk premium is 9%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged)? Assu..

  The capital intensisve nature of the steel business

Amalagmated Mining has very high operating leverage due to the capital intensisve nature of the steel business. The firms CEO is concerned about the variability in the firms EPS is sales should drop, and decides to take action. Which of thee followin..

  Common stock outstanding-return on stockholders equity

Rogers Inc. had 600,000 shares of $2 par common stock outstanding at the end of both 2013 and 2014. Retained earnings at the end of 2013 amounted to $2,160,000. No dividends were paid during 2014, and net income for the year was $600,000. Determine R..

  Easterns products-would reduce pre-tax annual cash flows

Eastern Clothing Company is considering manufacturing a new style of shirt, whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no new wor..

  Percentage change in price of bond

Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has two years to maturity, whereas Bond Dave has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the perce..

  Relationship between resources and products

A responsibility center in which the relationship between resources and products or services produced is not well defined is known as a(n)

  Compare to the expected return on the market

According to CAPM, how would the expected return on a stock with a beta of 1.5 compare to the expected return on the market? You have $75,000 to invest and want to put together a two-asset portfolio consisting of U.S. T-bills and a risky asset. If th..

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