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Q. Determination of Taxable Income. A simple trust has the subsequent receipts and expenditures for the current year. The long-term capital gain and trustee's fees are part of principal.
Dividends $20,000Long-term capital gain $15,000Trustee's fees $ 1,500Distribution to beneficiary $20,000
a. Illustrate what is the trust's taxable income under the formula approach? (Distribution deduction approach) (Complex trusts)
b. Illustrate what is the trust's taxable income under the short-cut approach? (Simple trust)
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