Stan Meadows funded a trust in 2014 and named Merchants Bank as trustee. He paid no gift tax on the transfer. The trustee in its discretion is to pay out income, but not prin-cipal, to Stan's children, Angela and Barry, for IS years. Then the trust will terminate, and its assets, including accumulated income, will be paid to Angela and Barry in equal amounts. (Separate shares are not to be maintained.) In the current year, the trustee distrib-utes $3,000 to Angela and $9,000 to Barry. The trust paid estimated federal income taxes of 56,000 from the principal account and reported the following additional results for the current yen The trusr instrument requires trustee's fees to be paid from principal.

Prepare a Form 1041, including any needed Schedule K-ls, for the crust established by Mr. Meadows. Ignore the alternative minimum tax (AMT). The trustee's address is 201 Fifth Ave., Northeast City, NY 10000. The crust's identification number is 74-1212121. Angela and Barry reside at 3 East 46th St.. North City, NY 11000.

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Dividends Interest on corporate bonds Interest on City of Cleveland (non-private activity) bonds Long-term capital loss on sale of stock Trustee's fee CPA's fee for tax return preparation Amounts Allocable to Income Principal $50,000 4,000 9,000 400 $12,000 2,400