The Kapoor Trust Is Your Client ?
Trust Agreement Provisions
Trust Accounting Income
Fees and Capital

question 57

Essay

The Kapoor Trust is your client. Complete the chart below, indicating Kapoor's trust accounting income for each of the alternatives. $$\begin{array} { l r } \text { Interest income, taxable } & \$ 60,000 \\\text { Interest income, tax-exempt } & 30,000 \\\text { Interest income, tax-exempt but AMT preference } & 10,000 \\\text { Long-term capital gain } & 40,000 \\\text { Trustee fee } & 5,000\end{array}$$ ?
Trust agreement provisions
Trust accounting income
Fees and capital gains allocable to corpus
______________________
Capital gains allocable to corpus, one-half of fees allocable to income
______________________
Capital gains allocable to income, silent concerning allocation of fees
______________________
Fees and exempt income allocable to corpus, silent concerning allocation of capital gain/loss
______________________

---

Definitions:

Potassium Hydroxide

A strong alkaline compound, often used in manufacturing and as a cleaning agent.

Caustic Potash

Also known as potassium hydroxide, a strong base used in various industrial and chemical processes.

Acid Base

Refers to the concepts of acid and base balance in biological systems, essential for maintaining homeostasis.

Hemochromatosis

A genetic disorder causing the body to absorb too much iron from the diet, leading to excessive iron deposits in organs.