During the current year an inter vivos trust received the following income:
Interest…………………………$30,000
Eligible dividends……………… 20,000
Capital gains………………………… 12,000
One half of the income was paid to a beneficiary of the trust, Gail, a 22 year-old student, with no other source of income. The remainder of the income was retained by the trust. The trust designated the source of the income paid to the beneficiary as follows: interest $15,000, eligible dividends $10,000 and capital gains $6,000.
Determine the net income, taxable income and federal tax payable for both Gail and the trust. Income Tax Act reference: ITA 104(2), (6), (19), (21); 122(1), (1.1).