Determination of Taxable Income. During the current year, a simple trust hasthe following receipts and expenditures. The Uniform Act governs the accounting classification.Corporate bond interest $60,000Long Term capital Gain $20,000
Trustee’s fees $3,000A.What amount must be distributed to the beneficiary?B.What is the trust’s taxable income under the shortcut approach? Determine the distribution deduction. A trust has net accounting income of $24,000 and incurs a trust’s fee of $1,000 in its principal account. What is the distribution deduction under the following situations? 14-35Determine the beneficiary’s Income. A complex trust is authorized to make discretionary distributions of income and principal to its two beneficiaries, Roy and Sandy. Separate shares are not required. For the current year, it has DNI and net accounting income of $80,000, all from taxable sources. It distributes $60,000 to Roy and $40,000 to Sandy. How much gross income should each beneficiary report? 14-36 Determination of Beneficiary’s Income. Refer to problem C;14-35. How would your answer change if the trust instrument required that $10,000 per year be distributed to Sandy, and the trustee also made discretionary
30.Determination of Taxable Income. A simple trust has the following receipts and expenditures for the current year. The trust instrument classified gains, losses, and trustee’s fees as part of principal.Dividends$20,000Long Term capital gain15,000Trustee’s fees1,500Distribution to beneficiary20,000A.What is the trust’s taxable income under the formula approach?B.What is the trust’s taxable income under the short cut approach? 31.Determination of Taxable Income. Refer to Problem C:14-30. How would your answer to Part A change if the trust in addition received $8,000 interest from tax exempt bonds, and it distributed $28,000 instead of $20,000?
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- Fall '15
- Taxation in the United States, DNI