Determination of Taxable Income. A simple trust has the following receipts and expenditures for the current year. The long term capital gain and trustee's fees are part of principal.
Dividends $20,000
Long-term capital gain 15,000
Trustee's fees 1,500
Distribution to beneficiary 20,000
a) What is the trust's taxable income under the formula approach of figure C14-1?
b) What is the trust's taxable income under the short cut approach?