Part A: Correctly Prepare the Computational Template for the Skippy Trust & Determine Entity Taxable Income

Part B: Determine how much income is reported as taxable for each of the beneficiaries.

The Skippy Trust is a trust that correctly uses the calendar year for tax purposes. The trustee of the Skippy Trust can distribute any amount of accounting and corpus to the beneficiaries, Sam and Jane.

The trustee decides to distribute $52,000 to Sam and $26,000 to Jane

For the current tax year. Skippy reports the following

Taxable Interest Income $80,000

Tax-Exempt Interest Income, allocable to income $40,000

Long-Term capital gains, allocable to corpus 160, 000

Fiduciary fees, allocable to corpus 18,000

ITEM Totals Acct. Inc. TI DNI/DD

Taxable Interest Income

Tax-Exempt Interest Income

Net-Long Term Capital Gain

Fiduciary Fees

Personal exemption

Accounting Income/ Taxable Income

Before the Distributions Deductions Step 1 Step 2

Exemption

Corpus Capital Gain

Net Exempt Income

Distributable Net Income (DNI)

Distribution Deduction Step 3

Entity Taxable Income Step 4

Part B: Gross income to be reported for each beneficiary.

Sam

Jane