Distributions firsttier or secondtier distributions

Assignment Help Accounting Basics

Reference no: EM13987699

The Kilp Sisters Trust is required to distribute $60,000 annually equally to its two income beneficiaries, Clare and Renee. If trust income is not sufficient to pay these amounts, the trustee can invade corpus to the extent necessary.

During the current year, the trust generates only taxable interest income and records DNI of $160,000; the trustee distributes $30,000 to Clare and $150,000 to Renee.

a. How much of the $150,000 distributed to Renee is included in her gross income?

b. How much of the $30,000 distributed to Clare is included in her gross income?

c. Are these distributions firsttier or secondtier distributions?

Reference no: EM13987699

Questions Cloud

Problem regarding the life insurance policy : Melba, age 42, has an annual salary of $70,000. Is Melba required to recognize income even though she is still alive at the end of the year and thus nothing has been collected on the life insurance policy? Explain.

Noncharitable income beneficiaries : 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? To Del?

What are the three functions of money : How is the discount rate different from the federal funds rate?

Find the the speed of the race car : A race car starts from rest on a circular track of radius 274 m. The cars speed increases at the constant rate of 0.560 m/s^2. At the point where the magnitudes of the centripetal and tangential accelerations are equal, find the the speed of the r..

Distributions firsttier or secondtier distributions : a. How much of the $150,000 distributed to Renee is included in her gross income? b. How much of the $30,000 distributed to Clare is included in her gross income? c. Are these distributions firsttier or secondtier distributions?

Trust taxable income : Assume the same facts as in Problem 20, except that the trust instrument allocates the capital gain to income.

How many calories of food must he consume on thursday : Samuel consumed 2129 calories of food on Monday, 2348 calories on Tuesday, and 1863 calories on Wednesday. In order for Samuel's average calorie intake to equal a daily average of 2200 calories, how many calories of food must he consume on Thursda..

Derivation of annual accounting : Betty, the grantor of the trust, is working with you on the language in the trust instrument relative to the derivation of annual accounting income for the entity. She will name Shirley as the sole income beneficiary and Benny as the remainder ben..

Compute hosta charitable contribution deduction : The Hosta Trust reports gross rent income of $72,000, expenses attributable to the rents of $55,000, and tax-exempt interest from state bonds of $18,000. Under the trust agreement, the trustee is to pay 20% of the annual trust accounting income to..

User Account

All Pages