Eighty percent of the income received by the Atom Trust this year constituted municipal bond interest.Atom's trustee also made a $50,000 gift to the United Fund,a qualifying charity.The charitable deduction associated with this gift is limited to $10,000.

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Section 265 disallowance rules apply to the charitable contributions of a fiduciary.A proportionate share of the payment is deemed paid from the exempt income and is nondeductible.

Eighty Percent of the Income Received by the Atom Trust