Marion Mosley created the Jenny Justice Trust in 2005 with First Rank named as trustee. For 20 years, the trust is to pay out all its income semiannually to the beneficiary, Jenny Justice. At the end of the twentieth year, the trust assets are to be distributed to Jenny's descendants. According to the trust instrument, capital gains are credited to principal, and depreciation is charged to principal. For the current year, the irrevocable trust reports the results shown on the next page.

Prepare a form 1041, including any needed Schedule K-1, for the Jenny Justice Trust. Ignore the alternative minimum tax (AMT). the trustee?s address is P.O. Box 100, Southwest City, TX 75000. The identification number of the trust is 74-1234567, Jenny, resides at 2 Mountain View, South City, AL 35000.

Transcribed Image Text:

Rental income Corporate bond interest Interest on tax-exempt (non-private activity) bonds Long-term capital gain on sale of land Maintenance and repairs of rental property Property taxes on rental property CPA's fee for tax return preparation Trustee's fee Depreciation Federal estimated income taxes paid from principal Amounts Allocable to Income Principal $15,000 27,000 8,000 1,500 700 500 $11,000ª 2,000 2,400 2,000