Little Trust, Whose Trust Instrument Is Silent with Respect to Depreciation

question 33

Essay

Little Trust, whose trust instrument is silent with respect to depreciation, collects rental income of $20,000 and pays property taxes of $1,000. Depreciation expense is $5,000.
Little Trust is in a state where all depreciation is charged to principal. What is the trust's net accounting income?

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Definitions:

Refined Grains

Processed grains that have had the germ and bran removed, which lowers their fiber content and nutritional value.

Non-breaching Party

In a contractual agreement, the party that has not failed to fulfill their contractual obligations and has been wronged by the other party's breach.

Reasonable

The term 'reasonable' is used to describe actions or decisions that are logical, fair, and sensible, based on the circumstances.

UCC Rule

Refers to regulations established under the Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.