Alex Passed Away This Year Leaving a Will Bequeathing Alex's

question 3

Essay

Alex passed away this year leaving a will bequeathing Alex's spouse, Carey, with $80,000 in cash, in addition to stocks and land, to be held in a spousal trust on Carey's behalf.The trust will pay Carey the annual income generated by the trust during Carey's lifetime.
Additionally, Alex's-33-year old child, Lane, is to receive a building to be held in a trust until Lane reaches the age of 45.Lane will also receive the assets in Carey's trust upon Carey's death.
The assets transferred to Carey consist of land with an ACB of $100,000 and a FMV of $300,000, and stocks valued at $200,000 with a cost base of $150,000.
The building transferred to Lane has an ACB of $200,000, UCC of $180,000, and FMV of $300,000.
Required:
A.Determine the immediate tax consequences (identify the income type and amount) for Alex.
B.Determine the immediate tax consequences for the assets received by the trust for Carey.
(Round all amounts to zero decimal places.Work must be shown for marks to be awarded.)

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Definitions:

Revenue Function

A financial formula used to calculate the total revenue generated by selling a particular quantity of goods or services.

Total Profits

The net income a company generates after paying all expenses, taxes, and costs, calculated by subtracting total costs from total revenues.

Entry Restrictions

Regulations or barriers that limit the ability of new competitors to enter and operate in a particular market.

Revenue Function

A mathematical representation that calculates the total revenue generated from the sale of goods or services at different prices.