Note: This problem is for the 2020 tax year.

Prepare the 2020 fiduciary income tax return (Form 1041) for the Green 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 Marcus White. The trust is not subject to the AMT. The year's activities of the trust include the following.

Dividend income, all qualified U.S. stocks	$10,000
Taxable interest income	50,000
Tax-exempt interest income	20,000
Net long-term capital gain, incurred 11/1	25,000
Trustee's fees	6,000

Under the terms of the trust instrument, cost recovery, net capital gains and losses, and fiduciary fees are allocable to corpus. The trustee is required to distribute $25,000 to Marcus every year. For the year, the trustee distributed $40,000 to Marcus and $40,000 to Marcus's sister, Ellen Hayes. No other distributions were made.

In computing DNI, the trustee properly assigned all of the deductible fiduciary's fees to the taxable interest income.

The trustee paid $4,000 in estimated taxes for the year on behalf of the trust. Any resulting refund is to be credited to the next tax year. The exempt income was not derived from private activity bonds.

The trust was created on December 14, 1953. It is not subject to any recapture taxes, nor can it claim any tax credits. None of its income was derived under a personal services contract. The trust has no economic interest in any foreign trust. Its Federal identification number is 11-1111122.

The trustee, Wisconsin State National Bank, is located at 3100 East Wisconsin Avenue, Milwaukee, WI 53201. Marcus lives at 9880 East North Avenue, Shorewood, WI 53211. His Social Security number is 123-45-6788. Ellen lives at 6772 East Oklahoma Avenue, Milwaukee, WI 53204. Her Social Security number is 987-65-4321.

Required:

Prepare the 2020 fiduciary income tax return (Form 1041) for the Green 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 Marcus White.

• If an amount box does not require an entry or the answer is zero, enter "0".
• Enter all amounts as positive numbers, unless otherwise instructed.
• If required, round final answers to the nearest dollar.
• Make realistic assumptions about any missing data.

Note: You are not required to complete Schedule D or the Schedule D Tax Worksheet.

Computational Template for Applying Five-Step Procedure

Question Content Area

Round to any division to six decimal places. Round your intermediate computations and final answers to the nearest dollar. Enter all amounts as positive numbers.

Item	Totals	Accounting Income	Taxable Income	Distributable Net Income/Distribution Deduction
Dividend income	$fill in the blank	$fill in the blank	$fill in the blank
Taxable interest income	fill in the blank	fill in the blank	fill in the blank
Exempt interest income	fill in the blank	fill in the blank
Net long-term capital gain	fill in the blank		fill in the blank
Fiduciary fees	fill in the blank		(fill in the blank )
Personal exemption			(fill in the blank )
Accounting income/Taxable income before the distribution deduction		$fill in the blank	$fill in the blank	$fill in the blank
		STEP 1	STEP 2
Exemption				fill in the blank
Corpus capital gain/loss				(fill in the blank)
Net exempt income				fill in the blank
Distributable net income			Taxable portion $fill in the blank	$fill in the blank
			fill in the blank
			$fill in the blank
Distribution deduction			(fill in the blank ) STEP 3	Lesser of $fill in the blank distributed or $fill in the blank taxable DNI distributed
Entity taxable income			$fill in the blank STEP 4

STEP 5: Allocate DNI

STEP 5:			Income Type
Beneficiary Taxation	Amount Received	DNI Received	Interest Income	Exempt Interest	Dividend Income
Totals	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Marcus	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Ellen	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank