Texas Trust receives $10,000 interest on U.S. Treasury bonds and $15,000 interest on State of...
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Accounting
Texas Trust receives $10,000 interest on U.S. Treasury bonds and $15,000 interest on State of New York bonds. All $25,000 is distributed to the trust beneficiary, Gary. Which of the following statements is correct?
- Gary has $25,000 of ordinary gross income.
- Gary has no taxable income because the trust must pay the tax.
- Gary has $10,000 of taxable interest income and $15,000 of tax-free interest income.
d.Gary has $10,000 of capital gain and $15,000 of tax-free interest income
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