Computing DNI, Taxable Income (LO. 2, 3)

The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each.

For the current tax year, Allwardt reports the following.

Ordinary income	$100,000
Long-term capital gains	30,000
Trustee commission expense, allocable to corpus	5,000

The trust instrument allocates the capital gain to income.

a. Each beneficiary is entitled to receive income of $ .

b. The trust's DNI is $ .

c. The trust's Selecttaxable incomelossCorrect 1 of Item 3 is $ .

d. Each of the beneficiaries can report $ of gross income.