A Trust Must Distribute All of Its Income Annually

question 87

Essay

A trust must distribute all of its income annually. Capital gains are allocated to principal. The trust has dividend income of $12,000, capital gains of $6,000, and no expenses. Calculate the trust's taxable income.

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Definitions:

Cooperative

A group or organization owned and operated by its members for their mutual benefit, or a behavior where individuals work together towards a common goal.

Normative Social Influence

The influence of other people that leads individuals to conform in order to be liked and accepted by them.

Informational Social Influence

The change in opinions or behavior that occurs when we conform to people who we believe have accurate information.

Distinction

A difference or contrast between similar things or people, often highlighting a unique feature or quality.