Question - The trustee of the Purple Trust can distribute any amount of accounting income and corpus to the trust's beneficiaries, Lydia and Kent. This year, the trust incurred the following.
Taxable interest income $40,000
Tax-exempt interest income 60,000
Long-term capital gains- allocable to corpus 30,000
Fiduciary's fees- allocable to corpus 10,000
The trustee distributed $40,000 to Lydia and $20,000 to Kent.
a. What is Purple's trust accounting income?
b. What is Purple's DNI?
c. What is Purple's taxable income?
d. How much is taxed to each of the beneficiaries?