Reference no: EM131504201
FIDUCIARY INCOME TAX RETURN PROBLEM Robert Dobbolina settled the Robert Dobbolina Irrevocable Children’s Trust on February 9, 1999 (EIN: 33-898989). In 2016, the Trust had items of income and expense as follows: Amount allocable to Income Principle Qualified Dividends $ 30,000 Rental Income from House 18,500 Charitable gift to United Way 15,000 Tax-exempt interest 15,000 Rental expenses-1 3,500 Trustee’s fee 600 $ 600 Fee for preparation of tax return 500 Capital gain on sale of stock -2 12,000 Distribution of income Jessica 18,000 Brandon 9,000 Payments of estimated tax 8,600 The trust agreement appointed Mojo Bank and Trust as its trustee with broad discretionary authority, including the Trustee’s authority to distribute income to Jessica and Branden during its 20-year term. The trustee has decided to allocate a portion of the estimated taxes to the beneficiaries this year. On February 9, 2019, the Trust will terminate and the assets will be distributed equally to Jessica and Branden, irrespective of any distributions the beneficiaries received during the life of the Trust (i.e. separate shares are not maintained for Jessica and Branden). The Trustee has never allocated any estimated tax payments to the beneficiaries and the Trust provides that capital gains are to be treated as “principal” by the Trustee. Mojo Bank and Trust Jessica Dobbolina Branden Dobbolina 1234 Money lane 6986 Shannon street 27366 Spike street Slim, MI 48007 Rachel, MI 48008 Fletch, MI 48009 EIN: 33-959595 SS: 123-45-6789 SS: 987-65-4321 Please prepare the 2016 Form 1041 and any other form or schedule required for the Robert Dobbolina Irrevocable Children’s Trust. The residential rental property is located at: 15939 North Park Blvd., North Park, Michigan 48007. The expenses include: $250 commission paid to a real estate management company for managing rental property, $2,000 for depreciation of the property, $1,250 for maintenance expenses. Trustee sold Corporate Stock on May 2, 2016. The stock was purchased for $8,000 on May 2, 2007.