The LMN Trust Is a Simple Trust That Correctly Uses

question 10

Essay

The LMN Trust 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 $30,000,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 Figure 28.3 in the text to address the following items.

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Definitions:

State Laws

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Constitution

A set of fundamental principles or established precedents according to which a state or other organization is governed.

Federalism

A system of government in which power is divided between a central government and smaller political units, such as states.

Articles of Confederation

The original constitution of the United States, ratified in 1781, which was replaced by the U.S. Constitution in 1789 due to its inability to provide a strong central government.