Last year, Scotty Mossop transferred investments that pay interest of $120,000 per annum to a family trust where the beneficiaries of the trust are Scotty's spouse, Rylee, and their two children, Ricky-Bobby (15 years old) and Dave (21 years old). The beneficiaries have no income other than that from the trust. The trust income and capital gains are allocated ¼ to the two kids and ½ to his spouse paid out to each beneficiary during the year. The total interest income earned by the trust during the year was $120,000. As well, a taxable capital gain of $36,000 was realized on the trust’s disposition of one of the bonds that Scotty transferred into the trust.

Determine the effect the trust income will have on the Taxable Income of Scotty (the settlor).