answer question a and b

During the year Drew makes the following asset transfers:

$25,000 to the mayors reelection campaign

$20,000 to Gus to reimburse his costs of ACL surgery

$55,000 to a local hospital to pay for Godfreys medical treatment

Transfer of a building worth $350,000 to an irrevocable trust. Based on the terms of the trusts document this will be considered a contribution of a present interest.

Further you can assume that the trust generated taxable income before any distributions of $60,000 of which $20,000 was distributed to its beneficiary George (unrelated to Drew), and that Drew had $2,000,000 of his lifetime transfer exemption remaining. Assume that the Trust faces and income tax rate of 40%, Drew of 30% and George of 25%.

a. What are Drews taxable current gifts for the year before considering the lifetime exception?

b. What is the total tax liability for Drew, the Trust, and George from the Trusts Taxable Income and distributions? The answer is the sum of the individual liabilities for all three parties.