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    Form 1041 for the Leonard and Regina Goodwin Trust for 2007

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    Using the information provided for The Leonard and Regina Goodwin Trust and the federal tax forms found on the IRA web site, complete the 2007 tax return for The Leonard and Regina Goodwin Trust.

    You will need the following forms:
    * 1041 - U.S. Income Tax Return for Estates and Trust (Use instruction sheet page 27 for tax rates and calculations.)

    I have attached the information provided for the Trust account and a copy of the 1041 from the IRS website.

    The Leonard and Regina Goodwin Trust

    Leonard Goodwin (SSN 441-55-1221)
    6556 Garden View Lane
    Springfield, MO 63120

    Regina Goodwin (SSN 461-15-8484)
    78 Highland Avenue
    Springfield, MO 63120

    The trust instrument empowers the trustee, First Missouri Bank and Trust 47-1234567.

    First Missouri Bank and Trust
    99 Front Street
    Springfield, MO 63120

    Income Expenses
    Dividends (All qualified) $20,000
    Beneficiaries 9,000 Fee for tax preparation 590
    Trust 11,000

    Adjusted Tax-exempt interest 10,500

    Fiduciary fees: $550
    Tax preparer fees for 2007: $590
    Personal exemption: $100
    Estimated tax payments: $1,600
    Distributable income allowable by law (Schedule B, line 8): $48,500
    Distribution of net accounting income:
    Leonard Goodwin $10,000 (includes tax exempt interest of $3,250)
    Regina Goodwin $7,000 (includes tax exempt interest of $2,250)

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    Solution Preview

    The basic concept of trust taxation is that a complex trust will report and pay tax on any undistributed income. A complex trust, by definition, is not required to distribute all of its income as a simple trust is, but the world of trust documents are so complex and so uniquely different that the taxability of distributions can be incredibly complex.

    The theory about distributions is that the ...

    Solution Summary

    The solution presents a tax return in .pdf format plus a narrative of explanation of general trust tax provisions. Following the basic discussion, there are specific explanations for the treatment of items in the tax return itself.