ACC – The Johnson Family Trust

| October 3, 2018

FACT PATTERNThe Johnson Family Trust has the following income and expenses: Interest income $8,000 Tax-exempt income $6,000 Capital gain income $4,000 Fiduciaries fees $2,000The trust agreement allocates fiduciaries fees to trust income. Capital gains are allocated to trust corpus.QUESTIONS1. What is the Fiduciary Accounting Income?2. Allocate the Fiduciary fees between interest income and tax-exempt income before calculating trust taxable income?3. What is the taxable income of the trust, before the distribution deduction? 4. Calculate Distributable Net Income (DNI) ?5. What is the net tax exempt income?6. Calculate the Distribution Deduction?7. Determine trust taxable income after the distribution deduction?8. Allocate DNI and its character to the beneficiaries?

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