Fred Kemper is holding debt securities which produce interest income of $150,000 per year. He has other sources of income in excess of $300,000. He has three sons who are triplets. They are 25 years old and currently have no income that is subject to tax. Their only tax credit is the basic personal credit. The trust will be required to distribute all of its income on an annual basis. Ignore the possibility that some of the income received by the beneficiaries will be subject to the TOSI.
Determine the 2020 savings in federal taxes that could be achieved by transferring the debt securities to a family trust with the triplets as equal income beneficiaries.

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The Answer of Fred Kemper is holding debt securities which produce interest income of $150,000 per year. He has other sources of income in excess of $300,000. He has three sons who are triplets. They are 25 years old and currently have no income that is subject to tax. Their only tax credit is the basic personal credit. The trust will be required to distribute all of its income on an annual basis. Ignore the possibility that some of the income received by the beneficiaries will be subject to the TOSI.
Determine the 2020 savings in federal taxes that could be achieved by transferring the debt securities to a family trust with the triplets as equal income beneficiaries.

Fred Kemper Is Holding Debt Securities Which Produce Interest Income