The trustee of the Pieper Trust can distribute any amount of accounting income and corpus to the trust’s beneficiaries, Lydia and Kent. This year, the trust’s records reflect the following:
Taxable interest income |
$40,000 |
Tax exempt interest income |
20,000 |
Long term capital gains—allocable to corpus |
80,000 |
Fiduciary’s fees—allocable to corpus |
9,000 |
The trustee distributed $26,000 to Lydia and $13,000 to Kent.
a. What is Pieper’s trust accounting income?
b. What is Pieper’s DNI?
c. What is Pieper’s taxable income?
d. What amounts are taxed to each of the beneficiaries?