For the current year, Trust J has the following receipts and expenses: Tax-exempt interest income $\quad\$ 12,000$
Dividends from domestic, taxable corporations $\quad 15,000$
Long-term capital gain (allocable to corpus under state law) $\quad 5,000$
Trustee fee (equally allocable to income and corpus under the trust instrument)$\quad ( 4000 )$ Based on the above facts, what is the trust's income for fiduciary accounting purposes?

Question

Quizplus · Accepted Answer

For fiduciary accounting purposes, the trust's income includes tax-exempt interest income ($12,000), dividends from domestic, taxable corporations ($15,000), but does not include the long-term capital gain ($5,000) as it is allocable to corpus under state law. The trustee fee ($4,000) is equally allocable to income and corpus, so only half of it ($2,000) reduces the income. Thus, the income for fiduciary accounting purposes is $12,000 + $15,000 - $2,000 = $25,000.

For the Current Year, Trust J Has the Following Receipts $12,000\quad\$ 12,000$12,000

For the Current Year, Trust J Has the Following Receipts $\quad\$ 12,000$