URGENT! **PLEASE SOLVE FOR THE FOLLOWING QUESTIONS:
Calculate the fiduciary accounting income?,
Calculate the distributable net income of the trust as computed under section 643(a)
Determine the character of the amounts distributed under IRC section 661(a)?,
& Determine Taxable Income of the trust
**PLEASE EXPLAIN EACH ANSWER**
** IGNORE THE VALUES IN THE BOXES**
1. Calculate DNI - using Treas. Reg. Section 1.661 Facts: Under the terms of the trust, which reports on the calendar year basis, charitable contribution a year is required to be paid out of income to designated charity. The balance of the income may, in the trustee's discretion, be accumulated or distributed to benficiary A. Expenses are allocated against income and the trust instrument requires a reserve for depreciation. During the taxable year 1955 the trustee contributes (see below) to charity and in his discretion distributies (see below) of income to A. The trust has the following items of income and expense for the taxable year 1955: Dividends Partially tax-exempt interest Fully tax-exempt interest Rents Rental Expenses Depreciation of rental property Trustee's commissions Charitable Contributions Discretionary Distribution $ $ $ $ $ $ $ $ $ 15,000 12,000 10,000 25,000 3,000 5,000 7,000 10,000 20,000 Calculate the fiduciary accounting income? $ Dividends Partially tax-exempt interest Fully tax-exempt interest Rents Total 15,000 12,000 10,000 25,000 $ $ 62,000 (a) Less: Expenses Rental Expenses Depreciation Trustee's Commissions Total $ $ $ 3,000 5,000 7,000 $ 15,000 (b) FAI Net Income IRC Section 643(b) = (a)-(b) $ 47,000 Calculate the distributable net income of the trust as computed under section 643(a) 25,000 15,000 12,000 $10,000 $10,000 $ 52,000 Rents Dividends Partially tax-exempt interest Fully-tax-exempt interest Total Less: Allocable Expenses (TE Inc/Total Income) x Alloc Trustee Fees = (TE Inc/Total Income) x Charitable Contributions = Charitable alloc to T/E income & to Other income Net $ 1,129.03 $ 1,613 $ 2,742 net T/E income $12,742 $ 52,000 Total Income Deductions Rental Expenses Depreciation of rental property Trustee's commission less $ alloc to T/E interest Charitable Contributions less $ alloc to T/E interest DNI section 643(a) 3,000 5,000 $ 5,870.97 $ 8,387 $ 22,258 $ 74,258 Determine the character of the amounts distributed under IRC section 661(a)? Rental Income Taxable Dividends Partially Tax Tax- Exempt Total exempt Interest interest $12,000 $ 10,000 $ 47,000 $ 25,000 Trust Income Less: Charitable contributions Rental Expenses Depreciation Trustee commissions Allocated DNI $ $ $ $ 3,226 $ 3,000 5,000 5,871 42,097 $ 1,613 $ 1,613 $ 1,613 $ 8,065 $ 3,000 $ 5,000 $ 5,871 1,613 $13,613 $ 11,613 $ 68,936 Allocation of Amount Distributed to Beneficiary $ 20,000 Determine Taxable income of the trust 25,000 $ $ $ $ 12,000 37,000 Rental Income Dividends Partially Tax-Exempt Gross Income Deductions Rental Expenses Depreciation Trustee Commission Charitable contribution 3,000 5,000 $ $ $ $ 22,258 $ Less: Taxable Dist to Beneficiary Less: Exemption $100 Taxable income to Trust (100) 67,158 $ 1. Calculate DNI - using Treas. Reg. Section 1.661 Facts: Under the terms of the trust, which reports on the calendar year basis, charitable contribution a year is required to be paid out of income to designated charity. The balance of the income may, in the trustee's discretion, be accumulated or distributed to benficiary A. Expenses are allocated against income and the trust instrument requires a reserve for depreciation. During the taxable year 1955 the trustee contributes (see below) to charity and in his discretion distributies (see below) of income to A. The trust has the following items of income and expense for the taxable year 1955: Dividends Partially tax-exempt interest Fully tax-exempt interest Rents Rental Expenses Depreciation of rental property Trustee's commissions Charitable Contributions Discretionary Distribution $ $ $ $ $ $ $ $ $ 15,000 12,000 10,000 25,000 3,000 5,000 7,000 10,000 20,000 Calculate the fiduciary accounting income? $ Dividends Partially tax-exempt interest Fully tax-exempt interest Rents Total 15,000 12,000 10,000 25,000 $ $ 62,000 (a) Less: Expenses Rental Expenses Depreciation Trustee's Commissions Total $ $ $ 3,000 5,000 7,000 $ 15,000 (b) FAI Net Income IRC Section 643(b) = (a)-(b) $ 47,000 Calculate the distributable net income of the trust as computed under section 643(a) 25,000 15,000 12,000 $10,000 $10,000 $ 52,000 Rents Dividends Partially tax-exempt interest Fully-tax-exempt interest Total Less: Allocable Expenses (TE Inc/Total Income) x Alloc Trustee Fees = (TE Inc/Total Income) x Charitable Contributions = Charitable alloc to T/E income & to Other income Net $ 1,129.03 $ 1,613 $ 2,742 net T/E income $12,742 $ 52,000 Total Income Deductions Rental Expenses Depreciation of rental property Trustee's commission less $ alloc to T/E interest Charitable Contributions less $ alloc to T/E interest DNI section 643(a) 3,000 5,000 $ 5,870.97 $ 8,387 $ 22,258 $ 74,258 Determine the character of the amounts distributed under IRC section 661(a)? Rental Income Taxable Dividends Partially Tax Tax- Exempt Total exempt Interest interest $12,000 $ 10,000 $ 47,000 $ 25,000 Trust Income Less: Charitable contributions Rental Expenses Depreciation Trustee commissions Allocated DNI $ $ $ $ 3,226 $ 3,000 5,000 5,871 42,097 $ 1,613 $ 1,613 $ 1,613 $ 8,065 $ 3,000 $ 5,000 $ 5,871 1,613 $13,613 $ 11,613 $ 68,936 Allocation of Amount Distributed to Beneficiary $ 20,000 Determine Taxable income of the trust 25,000 $ $ $ $ 12,000 37,000 Rental Income Dividends Partially Tax-Exempt Gross Income Deductions Rental Expenses Depreciation Trustee Commission Charitable contribution 3,000 5,000 $ $ $ $ 22,258 $ Less: Taxable Dist to Beneficiary Less: Exemption $100 Taxable income to Trust (100) 67,158 $
