Estate Finance Family Tax Plan Question
Assume for the purposes of this question that the UPAIA dictatesthe calculation of fiduciary accounting income.
1. In 2001, Larry creates a trust with Tenleytown Trust Companyas trustee. The trustee must distribute income to Susie, Jeff andLeon (the trust does not provide for distributions of principal).In 2002, the trust has $50,000 of interest from corporate bonds,$50,000 of interest from tax-exempt municipal bonds and $50,000 ofdividends. The trust also sells Asset A that has a basis of$100,000 for $500,000. In 2012, trust pays trustee fees toTenleytown Trust Company of $50,000 and attorney's fees of $50,000to the law offices of Hiram Katz. What is the trust's fiduciaryaccounting income? Analyze how much of each receipt anddisbursement should be allocated to income or principal.
