The Goosebury Trust was created on May 1, 2000 at the death of Arthur Goosebury.There are two named trust beneficiaries:Arty Jones and Bessie Gloss.The trust instrument requires the trustee to distribute $40,000 to Arty every year.In the current year the trust actually distributes $60,000 to Arty and $60,000 to Bessie.No other distributions are made.The trust requires that all cost recovery, net capital gains and losses, and fiduciary fees are allocable to corpus.

Goosebury trust activity for the current tax year is as follows:

Qualified dividend income $20,000

Taxable interest income$60,000

Tax-exempt interest income$40,000

Net long-term capital gain$50,000

Fiduciary fees$12,000

In computing DNI, the trustee properly allocated all deductible fiduciary fees to taxable interest income.Of course, all nondeductible fiduciary fees are allocated to tax-exempt interest income.

The trustee paid $6,000 in estimated taxes for the current year.Any refund shall be credited toward the following tax year.

The trusts Federal identification number is 22-2222222.The trustee, Utah State Bank, is located at 500 North Walnut Street, Cedar City, UT 84720.Arty lives at 325 West Crazy Drive, Cedar City UT 84720 and his social security number is 111-11-1111.Bessie lives at 124 East Silly Avenue, Cedar City UT 84720 and her social security number is 222-22-2222.Both trust beneficiaries are U.S. citizens.

REQUIRED

Prepare the 20xx fiduciary income tax return for the Goosebury Trust based on the information provided above.

No tax preparation software is allowed in preparing this return.

FORMS AND SCHEDULES TO INCLUDE

1. Form 1041 pages 1-2

2. Form 1041 Schedule K-1s for Arty and Bessie

3. Form 8960 Net Investment Income Tax

4. Fiduciary Income Tax Return Spreadsheets