Question

2. In 2012, Larry creates a trust with Ted as trustee. Ted (as trustee) may distribute income and principal to Susie, Jeff and Leon to provide for their health, education, maintenance and support at his discretion. In 2012, the trust has $15,000 of interest and $15,000 of dividends. Additionally, the trust received $115,000 for the sale of an asset with a basis of $100,000. In 2012, $15,000 is distributed to Susie, $10,000 is distributed to Jeff and $5000 is distributed to Leon. How much income does each of Jeff, Susie, Leon and the trust report for 2012 and why?

3. In 2012, Larry creates a trust with Ted as trustee. Ted (as trustee) may distribute income and principal to Susie, Jeff and Leon to provide for their health, education, maintenance and support at his discretion. In 2012, the trust has $15,000 of interest and $15,000 of dividends. Additionally, the trust received $115,000 for the sale of an asset with a basis of $100,000. In 2012, $20,000 is distributed to Susie, $20,000 is distributed to Jeff and nothing is distributed to Leon. How much income does each of Jeff, Susie, Leon and the trust report for 2012 and why?

Answer 1