Income beneficiary Turk received $30,000 from the Urgent Trust. Trust accounting income for the year was $100,000. The trust generated $20,000 in cost recovery deductions. How much can Turk deduct with respect to the cost recovery deductions that Urgent generated?

Question

Quizplus · Accepted Answer

Turk can deduct a proportionate share of the cost recovery deductions based on the income received. Since Turk received 30% of the trust accounting income ($30,000 out of $100,000), he can deduct 30% of the $20,000 cost recovery deductions, which is $6,000.

Income Beneficiary Turk Received $30,000 from the Urgent Trust