The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. It’s income beneficiaries (Lucy and Ethel) are entitled to the trust’s annual accounting income in share of one-half each For the current tax year, Allwardt reports the following: Ordinary income $100,000 Long-term capital gains, allocable to corpus 30,000 Trustee commission expense, allocable to corpus 5,000 Use the computational template applying the five-step procedure.
a. How much income is each beneficiary entitled to receive?
b. What is the trust’s DNI?
c. What is the trusts taxable income?
d. How much gross income is reported by each of the beneficiaries?
Please explain your answer