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If the grantor retains the power to revoke the trust, the trustee need not file a Form 1041. The Schmidt Trust generated a net operating loss this...
If the grantor retains the power to revoke the trust, the trustee need not file a Form 1041. The Schmidt Trust generated a net operating loss this year of $200,000. The Trust terminates December 31, 2006. Whitney receives $80,000 of corpus upon termination and William receives the remaining $120,000. Both Whitney and William are calendar year taxpayers. How much of this loss can the Trust, Whitney, or William deduct in 2006? A. Neither beneficiary gets a deduction this year. B. Whitney deducts $200,000. C. William deducts $120,000. D. Whitney and William each deduct $100,000. E. Whitney, William, and the Trust each deduct $66,667. During the current year, a trust received $160,000 of taxable interest income, paid trustee"s commissions of $20,000, and had no other income or expenses. The trust instrument requires that $80,000 be paid annually to Barbara, and $120,000 be paid annually to Whitney. How much income must Barbara and Whitney recognize for tax purposes? A. $80,000
