On January 1, 2023, Mr. Ruester settled a trust for the benefit of his adult child, Rebecca. For the 2023 taxation year, the trust received the following income:

• Interest: $11,500
• Eligible dividends from public corporations: $9,000
• Capital gains: $9,000

The trustee paid the following amounts of income to Rebecca during the year:

• Interest: $7,000
• Dividends: $6,000
• Capital gains: $6,000

During the year, Rebecca earned employment income of $15,000.

Assume the lowest marginal tax rate (federal and provincial combined) is 25%, which applies to Rebecca, and the top marginal tax rate is 50%. Assume the dividend tax credit is equal to the gross-up. Assume the basic personal credit is $3,600. Ignore the impact of all other tax credits.

REQUIRED

1. Compute the taxable income and tax payable of the trust and the beneficiary.
2. Suppose instead that the trust represented Mr. Reusters estate after he passed away. What type of trust should the estate representative designate it as, in order to reduce the tax payable of the trust? If designated as such, what would be the trusts tax payable during the 2023 tax year?