Mary is single, aged 70, and has heard that tax may be payable if her daughter Amy
Question:
Mary is single, aged 70, and has heard that tax may be payable if her daughter Amy receives her allocated pension funds in the event of her death. Mary has $500,000 in her allocated pension account: $50,000 tax free, balance from a taxed source. Amy is aged 40 and non-dependent.
Required:
Calculate the tax payable if Amy was to receive Mary's funds as a death benefit.
Explain to Mary the options for a recontribution strategy; include in your answer information on Mary's eligibility for withdrawing and contributing to super, the impact on her pension account.
Calculate the potential tax savings for Amy if Mary withdraws and recontributes $110,000.
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman