During the year ending December 31, 2019, the Stark family trust received actual eligible dividends (38% gross-up) frompublicly traded Canadian corporations in the amount of $400,000. In addition, it received actual non-eligible dividends(15% gross-up) from the family owned Canadian controlled private corporation in the amount of $100,000. Its only othersource of 2019 income was a capital gain of $80,000 on a disposition of investments in publicly traded equity securities.The only beneficiary of the trust is the family's 19 year old son, Michael Stark. During 2019, $150,000 of the dividendsfrom public companies and $50,000 of the dividends from the family's private company, and 1/2 of the capital gain wereNOT distributed to Michael.

Required: Indicate the tax effects of on 2019 Net Income for Tax Purposes for bothMichael and the trust

Answer rating: 100% (QA)

For the trust Eligible dividends 400000 x 138 552000 Taxable amount 552000 x ... View the full answer