Ernest Jacobson created an irrevocable trust in February of last year and designated his friend Eileen Frazier
Question:
Ernest Jacobson created an irrevocable trust in February of last year and designated his friend Eileen Frazier as trustee. Eileen is empowered, for life, to distribute such income as she deems appropriate to herself each year. Any income not distributed to her in a given year must be retained and distributed to the remainder man Elliott Jacobson after Eileen’s death. Last year, the trust received $22,000 of income, all from dividends, and Eileen distributed $4,000 of the income to herself. It is early in the second year, and your supervisor requested that you write a short memo addressing what portion, if any, of the income is taxed to the trust. She further suggested that you begin by consulting IRC Sec. 678.
Step by Step Answer:
Federal Taxation 2018 Comprehensive
ISBN: 9780134532387
31st Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson