Justice is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Oliver, Bart, Arthur, and Victor) are entitled to the trust’s annual accounting income in shares of one-fourth each. For the current calendar year, the trust incurs ordinary business income of $40,000, a long-term capital gain of $20,000 (allocable to income), and a trustee commission expense of $4,000 (allocable to corpus).
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