Fact Pattern:

Trust M, a simple trust, has dividends of $4,000 and rent receipts of $8,000. It paid fiduciary fees of $1,000. There is depreciation of $2,000, but no reserve for depreciation is required. The only beneficiary is single.

Question

What is the beneficiary's increase in taxable income from the trust?

• A.
• $10,000
• B.
• $0
• C.
• $9,000
• D.
• $11,000