Thomas, a 70 Year old, is the Grantor of an inter vivos irrevocable trust. 40% of the trust income is to be distributed currently to his wife for her remaining lifetime. The remaining trust income may, in the trustee's discretion, either be paid: () 30% to Andrew, grantor's son, paid to designated charities, or accumulated. The remaining income and principal may be distributed at the discretion of the trusteee to the Grantor'a three other children. The Trustee declined to make any additional distributions during the year so ponly Andrew receved a Distribution. The trust is to terminate at the death of W and the principal will then be payable to the choldren of the grantor in equal shares. No provision is made in the trust instrument with respect to depreciation of rental property. Capital gains are allocable to the principal account under the applicable local law. The trust both beneficiaries file returns on the calendar year basis. The records of the fiduciary show the following items of income and deduction for the taxable year 2022:

Rents$ 80,000 Dividends of domestic45,000 corporations Tax-exempt interest Partially tax-exempt interest 25,000 15,000 30,000 gains (long term) Depreciation of rental 10,000 property Expenses attributable to rental income 45,000 4,500 Trustee's commissions allocable to income account 4,500 Trustee's commissions allocable to principal account 3,000 Legal Fees Accounting Fees 4,500

1. 40% of the Trust Income is Distributed to Wife in Accordance with the Trust instrument 2. The Trustee Distributes 15% of the remaing income to Andrew 3. Assume the Trustee decides to Distrbute 10% of the income to Charity. This means the distributions of Income consist of 40% to spouse , 15% to Andrew and 10% to Charity. This means 35% is accumulated ( or the trust going to have to pay tax on 35% of the Income 3. The Trustee distributes 10% to Charity Remember to segregate tax exempt income and expenses associated with tax exempt 4. The remaining income is accumulated 5. Determine DNI

Distributable net income Less: Tax-exempt interest (as adjusted for expenses and the charitable contributions) Dividend exclusion allowable under 11 section 116 12 Deduction Allowable Under 13 661(a) 14 15 16 17 (g) In computing the amount includible in W's gross income under section 662(a)(1), the distribution to her is deemed to be composed of the following proportions of the items of income deemed to have been distributed to the 3 beneficiaries by the trust 4 Rents Dividends Partially tax-exempt interest Tax-exempt interest Total