A testamentary trust is required to distribute all of its income currently to the testators daughter; however, the trustee is authorized to pay principal to one or both of the testators daughter and nephew. In a year in which both DNI and FAI of the trust equal to $50,000, the trustee distributes $50,000 to the testators daughter and $25,000 to the testators nephew. None of the trusts income is tax-exempt.

What are the tax consequences to the trust, the daughter and the nephew?