Question

Another question to the previous problem - thanks for your response.

In the current year, the Mixon Family Trust had the following income and expense items:

Rental income 104,000, dividends from equity stocks 15,890, tax exempt interest income 23,400, long term capital gains from stocks 43,100 rental operating expenses 33,443 and trustee fees 12,000. Under the trust agreement - all capital gains and 50% of trustee fees are allocated to the principal account. The trustee has to maintain reserve for depreciation equal to tax depreciation deduction for current year of $9,650. The trustee must distribute 20,000 of trust income annually to Janey Mixon and has the discretion to distribute additional amounts of income or corpus to Janey, Jonathan, or Mark Mixon. During the year, the trustee distributed 30,000 to each of the three named beneficiaries.

Calculate amount and character of income distributed to each trust beneficiary for the current year.

Answer 1

Answer The Trust had income and expenses item income and enpenses item Rental income = 104.000 Tar exempt interest § 23400 is 000+15800 + 23400 Total income = 1432 90 Rental operateria expenses = 33443 Reserve for depreciation - 9650 Trustee fees allocated to "26000 = 143290 +33443 +9650+6000 - 94197

Trustee . Tanable income befor the deduction for distribcileón to bereficiaries = 109757 S t . Pasonal Szempton = 100 Net, Tex - Snempt interest (23,400 - 1969 = 21440 Less- long term capital Grane = 43100 . Net incom 8 6197 in Cen