How much income is each beneficiary entitled to receive

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Reference no: EM13950470

A.) Describe basic income tax planning strategies for estates.

B.) The Ricardo Trust is a simple trust that correctly uses the calendar 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 calendar year, the trust generates ordinary income of $50,000, a long-term capital gain of $25,000 (allocable to corpus), and a trustee commission expense of $10,000 (allocable to corpus). Use the format of Figure 20.3 to address the following items. 

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

b. What is the trust's DNI?

c. What is the trust's taxable income?

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

Reference no: EM13950470

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