Jerry created an inter$-$vivos trust for the benefit of his adult child, Elaine. The trustee is a family friend and has complete discretion to distribute the income to the beneficiary annually in any manner he chooses. He may even choose to capitalize the income in whole or in part.

The trustee determined that $50\%$ of the income of the trust including capital gains will be payable to Elaine each year. The capital of the trust will be distributed to Elaine, who was $19$ years of age at the time the trust was created, reaches age $45.$ However, the trustee may at his discretion distribute the capital before that date, but not before Elaine reaches age $39.$

Jerry transferred the following property to the trust:

COST FMV

Land $200,000300,000$

Shares of Public Corporations $1,000,0001,500,000$

In $2022,$ the trust had interest income of $$100,000,$ capital gains of $$50,000,$ and received taxable non$-$eligible dividends of $$30,000.$ The trust$$s taxation year$-$end is December $31.$

Additional information:

Elaine attended university full$-$time during $2022$ for $6$ months and incurred tuition fees of $$9,500.$ Elaine had no other sources of income.

REQUIRED:

a$)$ Outline the tax consequences to Jerry regarding his transfer of shares of public corporations to the trust. $(2$ marks$)$

b$)$ Calculate the taxable income and the Federal taxes payable for Elaine and the Trust for the $2022$ taxation year assuming the Trust deducts the amounts paid or payable to Elaine. The personal tax credit for $2022$ is $$14,398.$ The personal tax rate for Elaine is $15\%$ on the first $$50,197$ and $20\mathrm{.}5\%$ on the remaining income. Show all calculations. $(13$ marks$)$

c$)$ If the land were subsequently sold by the trust for $$500,000,$ what amount of taxable capital gain would result from the disposition? Show all calculations. $(2$ marks$)$

d$)$ Is there a tax consideration that should cause the trustee to consider liquidating the trust before Elaine reaches $45$ years of age? Explain. $(3$ marks$)$