Last year, Martine Brown transferred to a family trust, for no consideration, bonds that pay interest of $108,000 per annum. The beneficiaries of the trust are Martine's spouse, Michael, and their two children, Rachel (16 years old)and Dirk (22 years old). The beneficiaries have no income other than that from the trust. The trust income and capital gains are allocated equally, and are payable to each beneficiary during the year. Total interest income earned by the trust during the year was $108,000. As well, a capital gain of $36,000 was realized on the trust's disposition of one of the bonds that Martine Brown transferred into the trust.
Determine the Taxable Income of each beneficiary and calculate any effect the trust income will have on the Taxable Income of Martine. Ignore the possibility that some of the income received by the beneficiaries will be subject to the TOSI.

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The Answer of Last year, Martine Brown transferred to a family trust, for no consideration, bonds that pay interest of $108,000 per annum. The beneficiaries of the trust are Martine's spouse, Michael, and their two children, Rachel (16 years old)and Dirk (22 years old). The beneficiaries have no income other than that from the trust. The trust income and capital gains are allocated equally, and are payable to each beneficiary during the year. Total interest income earned by the trust during the year was $108,000. As well, a capital gain of $36,000 was realized on the trust's disposition of one of the bonds that Martine Brown transferred into the trust.
Determine the Taxable Income of each beneficiary and calculate any effect the trust income will have on the Taxable Income of Martine. Ignore the possibility that some of the income received by the beneficiaries will be subject to the TOSI.

Last Year, Martine Brown Transferred to a Family Trust, for No