Jack Green established the Jackson Trust by a gift in 1999. The trust instrument requires that the trustee (Fifth-Fourth Bank) distribute all of the trust income at least annually to Ned Jackson for life. In fact, all the trust income was distributed to Ned Jackson during the year. Under the trust document capital gains are credited to principal. Trustee's fees and estimated tax payments come out of principal for purposes of calculating fiduciary income. The 2012 results of the trust are as follows:

• Dividends $20,000
• Corporate Bond Interest $30,000
• Capital Gains $10,000
• Rental Income $30,000
• Tax-Exempt Interest $20,000
• Trustee's Fee $10,000
• Tax Return Preparation Fee $ 1,000
• Payment of Estimated Taxes $ 1,500
• Rental Expenses $ 5,000