Gwen establishes an irrevocable trust and transfers $10,000,000 to Friendly National Bank as Trustee. What are the
Question:
Gwen establishes an irrevocable trust and transfers $10,000,000 to Friendly
National Bank as Trustee. What are the gift tax consequences of the following
alternatives?
a. Income to Alex for life, remainder to Evan.
b. Income to Alex for life, remainder to Evan. The trustee has complete
discretion whether to distribute income to Alex or to accumulate it.
Accumulated income will be paid to Alex’s issue.
c. Income to Alex and Betsy in equal shares, remainder to Evan.
d. The trustee has complete discretion to distribute income in whatever
proportion to Alex, Betsy, Claude, and Dinah. The remainder goes to Evan at
the death of the last income beneficiary.
e. Income to Alex for life, remainder to Evan. Alex is 25 years old when the
trust is established. The trustee has discretion to accumulate income or
distribute it to Alex for health, education, or an emergency
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