Begin by reviewing the tax return scenario below. Then, prepare the $2022$ fiduciary income tax return $($Form $1041)$ for the Newman 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 Penny Newman. Omit all alternative minimum tax computations.

Links to all applicable forms can be found in the course. Instructions for each form can be found at the Forms, Instructions, & Publications section of the IRS website. Save the tax return in PDF format, with your last name in the filename, and submit the PDF file.

Tax return scenario

The year$$s activities of the trust include the following:

Dividend income, all U$.$S$.$ stocks $$85,000$

Taxable interest income $17,000$

Tax$-$exempt interest income $25,500$

Fiduciary$$s fees $6,800$

The trust and Penny both use the calendar tax year. Under the terms of the trust instrument, fiduciary$$s fees are allocated to income. The trustee must distribute all of the entity$$s accounting income to Penny Newman by March $15$ of the following year. The trustee followed this charge and made no other distributions during the year. Fiduciary$$s fees properly were assigned as an offset to taxable interest income.

Page $1$ of $2$

ACCT $614$

The trust was created on November $5,2010.$ There are no tax credits for the year, and none of the entity$$s income was derived from a personal services contract. The trust has no economic interest in any foreign trust. Its Federal identification number is $11-1111111.$

The trustee, Ridgemont Federal Bank, is located at $254$ Sky View Road, Naples, FL $34103.$ Its employer identification number is $98-3456789.$ Penny lives at $501$ Aqua Road, Bonita Springs, FL $34135.$ Her Social Security number is $987-65-4321$