Separate Share Rule (LO. 3)
Under the terms of the Lagos Trust instrument, the trustee has discretion to distribute or accumulate income on behalf of Willie, Sylvia, and Doris in equal shares. The trustee can also invade corpus for the benefit of any of the beneficiaries to the extent of each person\'s respective one-third interest in the trust. How much income is taxed? (Hint: Apply the separate share rule.)
In the current year, the trust has DNI of $120,000. Distribution and accumulation amounts were as follows.
To Willie: $40,000 from DNI and $10,000 from corpus.
To Sylvia: $25,000. The remaining $15,000 DNI is accumulated.
To Doris: $0. The $40,000 DNI is accumulated.
How much income is taxed to each taxpayer? If the amount is zero, enter \"0\".
Solution
Trust have $ 120000
if we divide same share part then each comes $ 30000
but given that:
Willie: $40,000 from DNI and $10,000 from corpus
Sylvia: $25,000. The remaining $15,000 DNI is accumulated.
Doris: $0. The $40,000 DNI is accumulated.
from part of DIN
willie got: 40000
sylvia got: 15000
Doris got: 40000
loggos got: 25000
A Corpus Fund denotes a permanent fund kept for the basic expenditures needed for the administrati
on and survival of the organization. The corpus fund is generally not allowed to be utilized for the
attainment of the purposes, but the interest/dividend accrued on such fund can be utilized as well as accumulated.
so corpus is not added in taxable income go final is
willie : 40000
sylvia : 15000
Doris : 40000
loggos : 25000
Taxable income
.
Separate Share Rule (LO- 3) Under the terms of the Lagos Trust instrum.docx
1. Separate Share Rule (LO. 3)
Under the terms of the Lagos Trust instrument, the trustee has discretion to distribute or
accumulate income on behalf of Willie, Sylvia, and Doris in equal shares. The trustee can also
invade corpus for the benefit of any of the beneficiaries to the extent of each person's respective
one-third interest in the trust. How much income is taxed? (Hint: Apply the separate share rule.)
In the current year, the trust has DNI of $120,000. Distribution and accumulation amounts were
as follows.
To Willie: $40,000 from DNI and $10,000 from corpus.
To Sylvia: $25,000. The remaining $15,000 DNI is accumulated.
To Doris: $0. The $40,000 DNI is accumulated.
How much income is taxed to each taxpayer? If the amount is zero, enter "0".
Taxable Income
a. Willie $
b. Sylvia $
c. Doris $
d. Lagos $
Solution
Trust have $ 120000
if we divide same share part then each comes $ 30000
but given that:
Willie: $40,000 from DNI and $10,000 from corpus
2. Sylvia: $25,000. The remaining $15,000 DNI is accumulated.
Doris: $0. The $40,000 DNI is accumulated.
from part of DIN
willie got: 40000
sylvia got: 15000
Doris got: 40000
loggos got: 25000
A Corpus Fund denotes a permanent fund kept for the basic expenditures needed for the
administrati
on and survival of the organization. The corpus fund is generally not allowed to be utilized for
the
attainment of the purposes, but the interest/dividend accrued on such fund can be utilized as well
as accumulated.
so corpus is not added in taxable income go final is
willie : 40000
sylvia : 15000
Doris : 40000
loggos : 25000
Taxable income
