LO.1 Compute the Federal income tax liability for the Valerio Trust. The entity reports the following transactions for the 2012 tax year. The trustee accumulates all accounting income for the year.

Operating income from a business $ 400,000 Dividend income, all from U.S. corporations 30,000 Interest income, City of San Antonio bonds 40,000 Fiduciary fees, deductible portion (10,000)

Net rental losses, passive activity (100,000)