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Prepare the 2011 fiduciary income tax return (Form 1041) for the Blue Trust. In addition, determine the amount and character of the income and expense items that each benefici- ary must report for 2011 and prepare a Schedule K–1 for Betty Blue. Omit all alternative minimum tax computations. The 2011 activities of the trust include the following. Dividend income, all U.S. stocks $50,000 Taxable interest income 30,000 Tax-exempt interest income 10,000 Fiduciary’s fees 6,000 The trust and Betty both use the calendar tax year. Under the terms of the trust instru- ment, fiduciary’s fees are allocated to income. The trustee must distribute all of the entity’s accounting income to Betty Blue by February 15 of the following year. The trustee followed th
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