Corporations, Partnerships, Estates & Trusts Chapter 20: Problems

31. LO.2, 3 Assume the same facts as in Problem 30, except that the trust instrument allocates the capital gain to income.

Below are the facts for problem 30

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

Use the format of Figure 20.3 to address the following items.

• a. How much income is each beneficiary entitled to receive?
• b. What is the trust's DNI?
• c. What is the trust's taxable income?
• d. How much gross income is reported by each of the beneficiaries?