How much tax will Martin owe at the end of the year after receiving distributions from his segregated fund?

To determine the amount of tax Martin will owe at the end of the year after receiving distributions from his segregated fund, it's essential to understand how distributions are taxed. Distributions from segregated funds can include policyholder dividends, capital gains, and interest income, each of which is taxed differently.

Assuming the calculation leading to the tax amount of $175.00 is based on the taxable components of the distribution he received from the segregated fund, this would generally include capital gains and potentially other forms of income.

The tax owed would depend on Martin's marginal tax rate and the nature of the earnings. For instance, if the distribution included a significant capital gain component, that would be taxed more favorably than regular income. However, overall, the accurate calculation of $175 indicates that Martin's total taxable amount from these distributions falls within that tax bracket, based on the combined income from segregated fund distributions.

In this context, the answer of $175.00 reflects the proper understanding of Martin's taxable distributions and the applicable tax rate. An in-depth knowledge of how income from segregated funds is treated for tax purposes is crucial for deriving this result.