The trustee of the Small Trust can distribute any amount of accounting income and corpus to the trust's income beneficiaries, Martha and Jonathan. This year, the trust incurred the following.

Taxable interest income $80,000

Tax-exempt interest income 40,000

Long-term capital gainsallocable to corpus 20,000

Fiduciary's feesallocable to corpus 12,000

The trustee distributed $80,000 to Martha and $80,000 to Jonathan.

a. What is Small's trust accounting income?

b. What is Small's DNI?

c. What is Small's taxable income?

d. How much gross income is recognized by each of the beneficiaries?

Answer rating: 100% (QA)

a To calculate Small Trusts accounting income we need to subtract the fiduciarys fees allocable to c... View the full answer