Interest income, City of San Antonio bonds 40,000
Fiduciary fees, deductible portion (15,000)
Net rental losses, passive activity (100,000)
Q. 24) LO.2,3 The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust’s annual accounting income in shares of one-half each.
For the current tax year, Allwardt reports the following:
Ordinary income $100,000
Long-term capital gains, allocable to corpus 30,000
Trustee commission expense, allocable to corpus 5,000
Use the format of Figure 28.3 to address the following items.
a. How much income is each beneficiary entitled to receive?
b. What is the trust’s DNI?
c. What is the trusts taxable income?
d. How much gross income is reported by each of the beneficiaries?
Q. 28) LO.3 The Dolce Estate reports the following items for the current tax year.
Dividend income $50,000
Taxable interest income $8,000
Passive activity income $20,000
Tax-exempt interest income $12,000
Distributable bet income $100,000
Dolce’s two noncharitable income beneficiaries, Brenda and Del, receive cash distributions of $20,000 each. How much of each class of income is deemed to have been distributed to Brenda? To Del?
Q. 29) LO.2,3 The trustee of the Pieper Trust can distribute any amount of accounting income and corpus to the trust’s beneficiaries, Lydia and Kent. This year, the trust incurred the following.
Taxable interest income $40,000
Tax exempt interest income 20,000
Long-term capital gains-allocable to corpus 80,000
Fiduciary’s fees-allocable to corpus 9,000
The trustee distributed $26,000 to Lydia and $13,000 to Kent.
a. What is Pieper’s trust accounting income.
b. What is Pieper’s DNI?
c. What is Pieper’s taxable income?
d. What amounts are taxed to each of the beneficiaries?
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