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Stacy creates irrevocable trust

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Reference no: EM133291496

Stacy creates an irrevocable trust. The income is payable to her Father for life and then the trust property reverts to Stacy, if Stacy survives. If she does not survive, it is distributable to her Child.

1. What are the gift tax consequences on the creation of the trust, assuming that the value of the corpus is $100,000, the value of Father's life estate is $70,000, and the value of Child's remainder is $24,000? - Stacey retains interest because there is a chance that the property comes back to Stacy.

2. What are the income tax consequences of the trust during its operation?

3. What are the estate tax consequences of the trust on Stacy's death during Father's life, assuming that the value of the trust corpus is $100,000, the value of Father's remaining life estate is $60,000, and the actuarial value of Stacy's reversion immediately before her death is $4,000?

Reference no: EM133291496

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