Dividends $20,000 Long-term capital gain 15,000 Trustee’s fees 1,500 Distribution to beneficiary 20,000 A simple trust has the following receipts and expenditures for the year. The trust instrument classifies gains, losses, and trustee’s fees part of the principal.

Dividends $20,000 Long-term capital gain 15,000 Trustee’s fees 1,500 Distribution to beneficiary 20,000 A simple trust has the following receipts and expenditures for the year. The trust instrument classifies gains, losses, and trustee’s fees part of the principal.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Dividends	$20,000
Long-term capital gain	15,000
Trustee’s fees	1,500
Distribution to beneficiary	20,000

A simple trust has the following receipts and expenditures for the year. The trust instrument classifies gains, losses, and trustee’s fees part of the principal.

What is the trust’s taxable income?

Definition Definition Increase in the value of a capital asset and the amount that is realized when the asset is sold off. A capital gain may be short-term or long-term depending on the tenure for which the asset is held.

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