The Taffy Trust is a simple trust. Sean is its sole beneficiary. In the current year, the trust earns $12,000 in taxable interest and $30,000 in rental income. In addition, the trust recognizes a $4,000 long-term capital gain and $1,100 long-term capital loss. The trustee assesses a fee of $6,500 for the year. Depreciation related to the rental property is $2,800.
a. If the trust agreement allocates fees, depreciation, and capital gains and losses to corpus, trust accounting income is $
b. However, if the trust agreement allocates one-half of the fiduciary's fees as well as all of the capital gains and losses to income, the trust accounting income is $

Solution and Explanation:

a. Accounting income is computed below:

Taxable interest12,000.00

Rental income30,000.00

Long term capital gain0.00

Long term capital loss0.00

Fees0.00

Less: depreciation-2,800.00

Trust accounting income39,200.00

b. One half of fiducary's fee = 6500 divided by 2 = 3250. This amount will be allocated to accounting income of the trust.

Taxable interest12,000.00

Rental income30,000.00

Long term capital gain4,000.00

Long term capital loss-1,100.00

Fees-3,250.00

Depreciation-2,800.00

Trust accounting income38,850.00

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.

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