Questions 19-22

- 19. distribution? a. b. c. d. e. The Edgerton Estate generated Distributable Net Income this year of $100,000, one- half of which was tax-exempt interest, and the balance of which was long-term capital gain. Kyle Edgerton, the sole income beneficiary of the Estate, received a distribution of the entire $150,000 fiduciary income of the entity. How does Kyle account for this $150,000 ordinary income $75,000 long-term capital gain, $75,000 exempt interest $100,000 ordinary income $66,667 long-term capital gain, $33,333 exempt interest $50,000 long-term capital gain, $50,000 exempt interest The Eagleton Trust generated Distributable Net Income this year of $100,000, one- third of which was portfolio income, and the balance of which was exempt interest. Under the terms of the trust, Clara Eagleton is to receive an annual income distribution of $40,000. At the discretion of the trustee, additional income distributions can be made to Clara, or to Clark Eagleton III. This year, the trustee's distributions to Clara totaled $70,000. Clark received $30,000. How much of the trust's distributable net income is assigned to Clara? $100,000, under the majority of Income" rule $70,000 $50,000 $30,000 20. a. b. C. d. e. $0 21. The Eagleton Trust generated Distributable Net Income this year of $100,000, one- third of which was portfolio income, and the balance of which was exempt Interest. Under the terms of the trust, Clara Eagleton is to receive an annual income distribution of $40,000. At the discretion of the trustee, additional income distributions can be made to Clara, or to Clark Eagleton III. This year, the trustee's distributions to Clara totaled $70,000. Clark received $60,000. How much of the trust's distributable net income is assigned to Clark? $100,000, under the "generation-skip rule $60,000 $46,154 $40,000 $0 22. . a. b. The trustee of the Epsilon Trust distributed an asset to Telly, a qualifying income beneficiary. The asset's basis to the trust was $10,000, and its fair market value on the distribution date was $30,000. Which of the following statements is true? Lacking any election by the trustee, Telly's basis in the asset is $10,000 Lacking any election by the trustee, Telly's basis in the asset is stepped up to $30,000 Lacking any election by the trustee, the trust recognizes $20,000 gross income on the distribution Assuming that the trustee made an election under IRC 643(e), the trust is allowed a $10,000 distribution deduction for this transaction Assuming that the trustee made an election under IRC 643(e). Telly recognizes $20,000 gross income on the distribution C. d. e