Complex Trust with Gains Not Distributed
Facts - Prepare Federal tax return only
1. Dividends are present
2. Tax-exempt income is present ($13,174) Turnpike Auhtority
3. Short and long-term capital gains are present—and not distributed
4. Taxes, fiduciary fees, legal fees and investment advisory fees present
5. Income distribution to the beneficiary
6. Dividends: Total = 19,296; Qualified = 18,839 Banyon Industries
Short-term capital gain: $5,888 - 10,000 shs -Van du Lait Mfg., Acq: 2/17/20 Sold: 12/12/20. Proceeds $50,667, Cost $44,779
Long-term capital gain: $29,167 - 10,000 shs - Costanza Ltd, Acq: 3/02/13, sold: 12/12/20 Proceeds $594,395. Cost $565,228.
7. State taxes from a prior year 603
Fiduciary Fees 8,704
Legal Fees. 1,295
Investment Advisor Fees. 10,019

8. Things to Note
1. Reduction of expenses due to presence of tax-exempt income
• Note - calculate the disallowance ratio for Fiduciary & Legal Fees
2. Denial of miscellaneous itemized deductions
3. Presence of Form 8960 imposing the Net Investment Income Tax on the trust
4. The trust pays tax on the capital gain
Tax is calculated on Schedule D

Additional Information:
Trust : Trust U/W Elaine Bennes
Federal I.D: 22-1234567
Trustee: Cosmo Bennes
Address: 111 Poppy Drive, Boca Del Vista, FL 33302
Beneficiary: Dolores J. Schoopie, 12 Newman Rd., Cranston, RI 87654
SSN: 123-34-5678

Answer rating: 100% (QA)

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