44 Questions 44-52 are based on the Jack Straw Case Study When Jack Straw was in college, he had a brief relationship with a Sarah, a sociology student on campus. After some deep soul searching, Jack came to terms with his sexuality and admitted to Sarah that he was gay. Jack and Sarah ended their relationship. Shortly thereafter, Sarah found out that her brief encounter with Jack had resulted in pregnancy, and Sarah eventually gave birth to little Andy. While Jack wanted to be supportive of Andy, Sarah was quite uncomfortable around Jack and told him that she would prefer that he limit his involvement with Andy to the occasional visit and financial support. Some years later, Jack had entered a long-term relationship with Max, and his involvement with Andy continued to decrease. Sarah married a young dentist named Charles, and after some lengthy discussions, Jack agreed to let Charles formally adopt little Andy, which he did. From this point on, Jack had almost no involvement with Andy and he no longer provided any financial support. Once a year, Sarah sent Jack a photograph of Andy, along with a brief letter outlining his accomplishments. Andy was never told that Jack was his biological father; he was simply "an old friend from Mom's college days". The relationship between Jack and Max grew stronger over the years, and they led quite a comfortable life. Jack built up a successful private corporation, of which he was the sole shareholder. Max worked full-time as the chief librarian of the local library. Together they purchased a wonderful country retreat and restored the on-site mansion to its original magnificence. They held the property as joint tenants. It was the only real estate that Jack owned, and it qualified as his principal residence. Max and Jack lived in a province that does not recognize same-sex couples as spouses for the purpose of its matrimonial property or intestacy legislation. Unfortunately, one icy morning Jack was driving to work when he lost control of his car and slammed into an old oak tree. Jack died on impact. Other than his mother, his estranged sister, Angela and his son, Andy, who was now 14, Jack had no surviving relatives. Prior to his death, Jack had never prepared a will. Also, he had never told his mother or Angela about the true nature of his relationship with Max. At the time of his death, Jack's business interest was worth $825,000, quite an accomplishment considering he started the business with only $2,000. Jack contributed $40,000 to RRSPs which were worth $68,000 at the time of his death, and Max was the named beneficiary of these RRSPs. Jack also owned a $200,000 term life insurance policy on his own life, which named Max beneficiary. At the time of his death, the total XCO At the time of his death, Jack's business interest was worth $825,000, quite an accomplishment considering he started the business with only $2,000. Jack contributed $40,000 to RRSPs which were worth $68,000 at the time of his death, and Max was the named beneficiary of these RRSPs. Jack also owned a $200,000 term life insurance policy on his own life, which named Max as the beneficiary. At the time of his death, the total value of the rural property was $450,000. Jack and Max originally bought the property for $200,000. Jack also had other personal assets, including a car, boat and skidoo, valued at about $100,000. Jack lived in a province, where the probate fees are: i. on the first $50,000 of the value of the estate being administered, $5.00 per thousand dollars or part thereof; ii. on the portion of the value of the estate being administered that exceeds $50,000, $15.00 per thousand dollars or part thereof. Assuming that Jack never used the personal lifetime capital gains exemption or the exemption for qualified small businesses, by how much will his taxable income increase as a result of the transfer of his business interest? $ 36,500 b) $ 61,500 $ 82,000 d) $411,500 Stop Share Minutes remaining: 224 Previous Question Next Question View Summary and Submit CERTIFIED FINANCIAL PLANNER and are certification marks owned outside the US Standards Board Ltd. (FPSB