Compute the Federal income tax liability for the Kim

Compute the Federal income tax liability for the Kim Trust. The trustee reports the following transactions for the 2011 tax year.

20. Compute the Federal income tax liability for the Kim Trust. The trustee reports the following transactions for the 2011 tax year. The trustee accumulates all accounting income for the year.

Operating income from business $500,000

Dividend income, all from U.S. corporations 30,000

Interest income, City of San Antonio bonds 40,000

Fiduciary fees, deductible portion (15,000)

Net rentals losses, passive activity (100,000)

24. The Allwardt trust is a simple trust that correctly uses the calendar year as the fiscal year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each.

For the current tax year, Allwardt reports the following.

Ordinary income $100,000

Long-term capital gains allocable to corpus 30,000

Trustee commission expense, allocable to corpus 5,000

Use the format Figure 20.3 to address the following items.

a) How much income is each beneficiary entitled to receive?

b) What is the trust DNI?

c) What is the trusts taxable income?

d) How much gross income is reported by each of the beneficiaries?

28. The Dolce Estate reports the following items for the current tax year:

Dividend Income $50,000

Taxable interest income 8,000

Passive activity income 30,000

Tax-exempt interest income 12,000

Distributable net income $ 100,000

Dolce’s two noncharitable income beneficiaries, Brenda and Del, receive cash distributions of $20,000 each. How much of each class of income is deemed to have been distributed to Brenda?

29. The trustee of the Pieper Trust can distribute any amount of accounting income and corpus to the trust’s beneficiaries, Lydia and Kent. This year, the trust’s records reflect the following:

Taxable interest income $40,000

Tax-exempt interest income 20,000

Long-term capital gains – allocable to corpus 80,000

Fiduciary’s fees – allocable to corpus 9,000

a. What is Piper’s trust accounting income?

b. What is Piper’s DNT?

c. What is Pieper’s taxable income?

d. What amounts are taxed to each of the beneficiaries?