Question: A simple trust has the following receipts and expenditures for the current year. The trust instrument classifies gains, losses, and trustees fees as part of

A simple trust has the following receipts and expenditures for the current year. The trust instrument classifies gains, losses, and trustee’s fees as part of principal.
Dividends …………………………………. $20,000
Long-term capital gain ……………………. 15,000
Trustee’s fees ……………………………… 1,500
Distribution to beneficiary ………………… 20,000
a. What is the trust’s taxable income under the formula approach of Figure?
b. What is the trust’s taxable income under the short-cut approach?

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a Taxable income is 14700 calculated as follows Dividends 20000 L... View full answer

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