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Problem - The Allwardt Trust is a simple trust. 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 $375,000
Long-term capital gains, allocable to corpus 112,500
Trustee commission expense, allocable to corpus 18,750
Required -
1. How much income is each beneficiary entitled to receive?
2. How much gross income is reported by each of the beneficiaries?
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