Note: This problem is for the 2020 tax year.

Do the 2020 fiduciary income tax return (Form 1041) for the Green Trust. In addition, determine the amount and character of the income and expense items that each beneficiary must report for the year, and prepare a Schedule K-1 for Marcus White. The trust is not subject to the AMT. The year's activities of the trust include the following.

Dividend income, all qualified U.S. stocks	$10,000
Taxable interest income	50,000
Tax-exempt interest income	20,000
Net long-term capital gain, incurred 11/1	25,000
Trustee's fees	6,000

Under the terms of the trust instrument, cost recovery, net capital gains and losses, and fiduciary fees are allocable to corpus. The trustee is required to distribute $25,000 to Marcus every year. For the year, the trustee distributed $40,000 to Marcus and $40,000 to Marcus's sister, Ellen Hayes. No other distributions were made.

In computing DNI, the trustee properly assigned all of the deductible fiduciary's fees to the taxable interest income.

The trustee paid $4,000 in estimated taxes for the year on behalf of the trust. Any resulting refund is to be credited to the next tax year. The exempt income was not derived from private activity bonds.

The trust was created on December 14, 1953. It is not subject to any recapture taxes, nor can it claim any tax credits. None of its income was derived under a personal services contract. The trust has no economic interest in any foreign trust. Its Federal identification number is 11-1111122.

The trustee, Wisconsin State National Bank, is located at 3100 East Wisconsin Avenue, Milwaukee, WI 53201. Marcus lives at 9880 East North Avenue, Shorewood, WI 53211. His Social Security number is 123-45-6788. Ellen lives at 6772 East Oklahoma Avenue, Milwaukee, WI 53204. Her Social Security number is 987-65-4321.

Required:

do the 2020 fiduciary income tax return (Form 1041) for the Green Trust. In addition, determine the amount and character of the income and expense items that each beneficiary must report for the year, and prepare a Schedule K-1 for Marcus White.

Taxable interest income 50,000 50,000 50,000 V Exempt interest income 20,000 20,000 Net long-term capital gain 25,000 25,000 Fiduciary fees 6,000 V 4,500 V ) Personal exemption 100 V ) Accounting income/Taxable income 80,000 80,400 $ 80,400 before the distribution deduction STEP 1 STEP 2 Exemption 100 Corpus capital gain/loss -25,000 X ) Net exempt income 18,500 Distributable net income Taxable portion 74,000 74,000 24,900 X 18,500 X Distribution deduction 55,500 V ) Lesser of $ 80,000 distributed ortions 16 Add lines 10 through 15b ................................................... b 17 Adjusted total income or (loss). Subtract line 16 from line 9 .......... 17 80,500 VI 18 Income distribution deduction (from Schedule B, line 15). Attach Schedules K1 (Form 1041) . . . . 19 Estate tax deduction including certain generation-skipping taxes (attach computation) ......... 20 Qualified business income deduction. Attach Form 8995 or 8995-A ........................ 21 Exemption ............................................................... 22 Add lines 18 through 21 ...................................................... Tax and Payments Sign Here 23 Taxable income. Subtract line 22 from line 17. If a loss, see instructions .................... 24 Total tax (from Schedule G, Part 1, line 9) ........................................ 25 2020 net 965 tax liability paid from Form 965-A, Part 11, column (k), line 4 .................. 26 Total payments. (from Schedule G, Part 11, line 19) ................................. 27 Estimated tax penalty. See instructions ........................................... 28 Tax due. If line 26 is smaller than the total of lines 24, 25, and 27, enter amount owed ......... 29 Overpayment. If line 26 is larger than the total of lines 24, 25, and 27, enter amount overpaid . . . 30 Amount of line 29 to be: a Credited to 2021 b ; b Refunded ............ > Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based 1.. _u :__:1___-_..=1_ 1:...L:_L _________ L_1 __.. |__1...i-_-__ 1 Adjusted total income. See instructions . . 1 80,500 2 Adjusted tax-exempt interest . . . . 2 18,500 3 Total net gain from Schedule D (Form 1041), line 19, column (1). See instructions . 3 4 Enter amount from Schedule A, line 4 (minus any allocable section 1202 exclusion) . . . . . . ... 4 5 Capital gains for the tax year included on Schedule A, line 1. See instructions . . 5 Enter any gain from page 1, line 4, as a negative number. If page 1, line 4, is a loss, enter the loss as a 6 -25,000 positive number . . . . . 7 Distributable net income. Combine lines 1 through 6. If zero or less, enter -0-. 7 74,000 8 If a complex trust, enter accounting income for the tax year as determined under the governing instrument and applicable local law . . . 80,000 X 9 Income required to be distributed currently . . . 9 25,000 10 Other amounts paid, credited, or otherwise required to be distributed . . 10 55,000 11 Total distributions. Add lines 9 and 10. If greater than line 8, see instructions . . 11 80,000 12 Enter the amount of tax-exempt income included on line 11 . . . 12 18,500 13 Tentative income distribution deduction. Subtract line 12 from line 11 . . . 13 61,500 14 Tentative income distribution deduction. Subtract line 2 from line 7. If zero or less, enter -0- . . 14 55,500 15 Income distribution deduction. Enter the smaller of line 13 or line 14 here and on page 1, line 18 . 15 55,5001 Tax: a Tax on taxable income. See instructions . . 1a 4,015 X b Tax on lump-sum distributions. Attach Form 4972 . . 1b c Alternative minimum tax (from Schedule I (Form 1041), line 54) . . . . 10 0 d Total. Add lines la through 1c . . . . . . 1d 4,015 X 2a Foreign tax credit. Attach Form 1116 . . 2a b General business credit. Attach Form 3800 . . 2b c Credit for prior year minimum tax. Attach Form 8801 . . 2c d Bond credits. Attach Form 8912 . . . 2d e Total credits. Add lines 2a through 2d . . 2e 0 3 Subtract line 2e from line 1d. If zero or less, enter - 0-. . 3 X 4 Tax on the ESBT portion of the trust (from ESBT Tax Worksheet, line 17). See instructions . . 4 5 Net investment income tax from Form 8960, line 21 . . . . 5 462 X 6 Recapture taxes. Check if from: 0 Form 4255 o Form 8611 . . 6 7 Household employment taxes. Attach Schedule H (Form 1040) . 7 8 Other taxes and amounts due . . . 8 9 Total tax. Add lines 3 through 8. Enter here and on page 1, line 24 . 9 496 XEl Regulations section 1.1411-10(g) election (see instructions) 1 Taxable interest (see instructions) ................................................ 2 Ordinary dividends (see instructions) .............................................. 3 Annuities (see instructions) ..................................................... 4a Rental real estate, royalties, partnerships, S corporations, trusts, etc. (see instructions) .................................... 4a b Adjustment for net income or loss derived in the ordinary course of a non-section 1411 trade or business (see instructions) ......... 4b c Combine lines 4a and 4b .................................. . . . . ................. 53 Net gain or loss from disposition of property (see instructions) . . . b Net gain or loss from disposition of property that is not subject to net investment income tax (see instructions) .................. c Adjustment from disposition of partnership interest or S corporation 5c stock (see instructions) ......................... d Combine lines 5a through 5c ................................................... 6 Adjustments to investment income for certain CFCs and PFICs (see instructions) ............... 7 Other modifications to investment income (see instructions) .............................. 8 Total investment income. Combine lines 1, 2, 3, 4c, 5d, 6, and 7 ........................... 1 50,000 w/ 2 10,000 ~/ 3 6 7 s - m Investment Expenses Allocable to Investment Income and Modifications ............ ,..,.........g..................................................... _ 10 Additional modifications (see instructions) ......................................... 10 11 Total deductions and modifications. Add lines 9d and 10 ............................... 11 Part III Tax Computation 12 Net investment income. Subtract Part II, line 11, from Part I, line 8. Individuals, complete lines 13-17. Estates and trusts, complete lines 18a-21. If zero or less, enter -0- ................... 12 Individuals: 13 Modied adjusted gross income (see instructions) ............ 13 14 Threshold based on ling status (see instructions) ............ 14 15 Subtract line 14 from line 13. If zero or less, enter -0- ......... 15 16 Enter the smaller of line 12 or line 15 ............................................. a 17 Net investment income tax for individuals. Multiply line 16 by 3.8% (0.038). Enter here and include on your tax return (see instructions) ............................................. ! Estates and Trusts: 18a Net investment income (line 12 above) ..................... 18a C] X b Deductions for distributions of net investment income and deductions under section 642(c) (see instructions) ............. 18b a c Undistributed net investment income. Subtract line 18b from 18a (see instructions). If zero or less, enter -0- ................... 18c a 19a Adjusted gross income (see instructions) .................... 193 a n:_i_11._1._.. L.___i_1._ :_._ __1._..__ _._J .__..1..1 :_._ LL- ._____ 15 Subtract line 14 from line 13. If zero or less, enter -0- ......... 16 Enter the smaller of line 12 or line 15 ............................................. 17 Net investment income tax for individuals. Multiply line 16 by 3.8% (0.038). Enter here and include on your tax return (see instructions) ............................................. Estates and Trusts: 18a Net investment income (line 12 above) ..................... b Deductions for distributions of net investment income and deductions under section 642(c) (see instructions) ............. c Undistributed net investment income. Subtract line 18b from 18a (see instructions). If zero or less, enter 0 ................... 19a Adjusted gross income (see instructions) .................... b Highest tax bracket for estates and trusts for the year (see instructions) .................................... c Subtlact line 19b from line 19a. If zero or less, enter -0- ......... 20 Enter the smaller of line 18c or line 19c ........................................... 2 [2 X 21 Net investment income tax for estates and trusts. Multiply line 20 by 3.8% (0.038). Enter here and include on your tax return (see instructions) ...................................... 21 I:] X BAA For Paperwork Reduction Act Notice, see your tax return instructions. Form 8960 (2020) Schedule K-1or Marcus White Prepare a Schedule K-1 for Marcus White. For "Other Information", letter A is for adjusted tax-exempt income and letter E is for the net investment income. 661117 0 Final K-1 0 Amended K-1 OMB No. 1545-0092 Schedule K-1 Beneficiary's Share of Current Year Income, 2020 Part III (Form 1041) Deductions, Credits, and Other Items Department of the Treasury For calendar year 2020, or tax 1 Interest income 11 Final year deductions Internal Revenue Service year 6,800 X beginning ending 2a Ordinary dividends Beneficiary's Share of Income, Deductions, 10,000 X Credits, etc. See back of form and instructions. 2b Qualified dividends Part I Information About the Estate or Trust 10,000 X 3 A Estate's or trust's employer identification number Net short-term capital gain 11-1111122 Net long-term capital gain B Estate's or trust's name GREEN TRUST 4b 28% rate gain 12 Alternative minimum tax C Fiduciary's name, address, city, state, and ZIP code adjustment WTCCONSTN STATE NATTONAL RANK TRIISTEEPart II Information About the Beneficiary 7 |Net rental real estate 13 Credits and credit recapture F Beneficiary's identifying number income 123-45-6788 G Beneficiary's name, address, city, state, and ZIP code 8 Other rental income MARCUS WHITE 9880 EAST NORTH AVENUE 9 |Directly apportioned SHOREWOOD, WI 53211 deductions 14 Other information A 18,500 X 10 Estate tax deduction E 55,500 X *See attached statement for additional information. Note. A statement must be attached showing the beneficiary's share