A Trust Reports the Following Results All of the Items Above Are Allocated to Income

question 72

Essay

A trust reports the following results: $\begin{array}{lr}\text { Dividend income } & \$ 20,000 \\\text { Capital gains } & 10,000 \\\text { Tax-exempt interest } & 10,000 \\\text { Trustee fees } & 3,000\end{array}$ All of the items above are allocated to income. Calculate the maximum amount of trustee fees that are deductible

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Definitions:

Note Payable

A formal written agreement to repay a borrowed amount of money, including terms such as interest rate and maturity date.

Accounts Payable

The amounts owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Promissory Note Receivable

This is a financial asset representing a written promise by one party to pay a specified sum of money to another party under agreed terms.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan remaining.