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Counsell is a simple trust that correctly uses the calendar year for tax purposes. Its income...

Counsell is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Kathie, Lynn, Mark, and Norelle) are entitled to the trust’s annual accounting income in shares of one-fourth each. For the current calendar year, the trust has ordinary business income of $40,000, a long-term capital gain of $20,000 (allocable to corpus), and a trustee commission expense of $4,000 (allocable to corpus).

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 is taxed to each of the beneficiaries?

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Expert Solution

The question is about taxable income to beneficiaries and taxable amount to trust. Refer below image for more detailed solution.

ekkarill92 answered 2 years ago
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