The Raja Trust operates a welding business. Its current-year cost recovery deductions properly amount to $75,000.
Raja's accounting income was $100,000 of which $40,000 was distributed to first-tier beneficiary Chuck, $25,000 was distributed to second-tier beneficiary Ruby, and $35,000 was accumulated by the trustee. Ruby also received a
$25,000 discretionary corpus distribution. Raja's DNI was $80,000. Identify the treatment of Raja's cost recovery deductions.

Question

Quizplus · Accepted Answer

The Answer of The Raja Trust operates a welding business. Its current-year cost recovery deductions properly amount to $75,000.
Raja's accounting income was $100,000 of which $40,000 was distributed to first-tier beneficiary Chuck, $25,000 was distributed to second-tier beneficiary Ruby, and $35,000 was accumulated by the trustee. Ruby also received a
$25,000 discretionary corpus distribution. Raja's DNI was $80,000. Identify the treatment of Raja's cost recovery deductions.

The Raja Trust Operates a Welding Business