At the beginning of 2020, Connie McGuire transferred publicly traded stocks to a family trust. Connie's adjusted cost base for these shares was $240,000 and they had a fair market value at the time of transfer of $300,000. The trust's beneficiaries are Connie's two sons, Bart and Billy. They are both in their early 30s.
During the remainder of 2020, the stocks paid eligible dividends $38,000, all of which were distributed to the two beneficiaries during the year. There are to be no capital distributions from the trust for 5 years.
In early 2020, Bart sells his interest to Billy. At that time, the securities have a fair market value of $420,000. Based on this, Bart pays $210,000 to Billy for his interest.
Determine the tax consequences of this transaction to each of the brothers.

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The Answer of At the beginning of 2020, Connie McGuire transferred publicly traded stocks to a family trust. Connie's adjusted cost base for these shares was $240,000 and they had a fair market value at the time of transfer of $300,000. The trust's beneficiaries are Connie's two sons, Bart and Billy. They are both in their early 30s.
During the remainder of 2020, the stocks paid eligible dividends $38,000, all of which were distributed to the two beneficiaries during the year. There are to be no capital distributions from the trust for 5 years.
In early 2020, Bart sells his interest to Billy. At that time, the securities have a fair market value of $420,000. Based on this, Bart pays $210,000 to Billy for his interest.
Determine the tax consequences of this transaction to each of the brothers.

At the Beginning of 2020, Connie McGuire Transferred Publicly Traded