Counsell Is a Simple Trust That Correctly Uses the Calendar

question 112

Essay

Counsell is a simple trust that correctly uses the calendar year for tax purposes.Its income beneficiaries (Kathie,Lynn,Mark,and Norelle) are entitled to the trust's annual accounting income in shares of one-fourth each.For the current calendar year,the trust has ordinary business income of $40,000,a long-term capital gain of $20,000 (allocable to corpus),and a trustee commission expense of $4,000 (allocable to corpus).Use the format of Exhibit 20.5 in the text to address the following items.
a.How much income is each beneficiary entitled to receive?
b.What is the trust's DNI?
c.What is the trust's taxable income?
d.How much is taxed to each of the beneficiaries?

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Definitions:

Cellulitis

A common and potentially serious bacterial skin infection, characterized by redness, swelling, warmth, and pain in the affected area.

Streptococcus

A genus of spherical, Gram-positive bacteria that often cause infections in humans and animals.

Staphylococcus

A genus of gram-positive bacteria, often found on the skin and in the noses of people, which can cause a wide range of infections.

Impetigo Contagiosa

A highly contagious skin infection caused by bacteria, leading to red sores that can rupture and form honey-colored crusts.