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Walter Passed Away This Year,leaving a Will Bequeathing His Wife

question 8

Essay

Walter passed away this year,leaving a will bequeathing his wife with $80,000 in cash,in addition to his stocks and land,to be held in a spousal trust on her behalf.The trust will pay her the annual income generated by the trust during her lifetime.
Additionally,Walter's 33 year old son,Steven,is to receive a building to be held in a trust until Steven reaches the age of 45.Steven will also receive the assets in his mother's (Walter's wife)trust upon her death.
The assets transferred to Walter's wife 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 Steven has an ACB of $200,000,UCC of $180,000,and FMV of $300,000.
Required:
A)What are the immediate tax consequences (identify the income type and amount)to Walter? Show calculations.
B)What are the immediate tax consequences for the assets received by the trust for Walter's wife?

Recognize the conditions under which sales taxes and personal property taxes are deductible.

Identify the requirements for deducting charitable contributions.

Understand the implications of foreign taxes paid for deductions or credits.

Recognize the specific deductions available for job hunting and unreimbursed employee business expenses.

Definitions:

Situational Attributions

The process of attributing a person's behavior to external or situational factors.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the power of situational influences.

Dispositional Causes

refer to internal factors such as traits, beliefs, and attitudes that are thought to drive an individual's behavior.

Fundamental Attribution Error

The tendency to attribute others' behaviors to their character or personality, while underestimating situational factors.