In Computing Distributable Net Income (DNI) for a Trust, One

question 111

True/False

In computing distributable net income (DNI) for a trust, one removes any net capital gain or loss that is allocable to income.

---

Definitions:

Earnings Rate

The rate at which a company or investment generates income, typically expressed as a percentage of the investment or capital.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Net Present Value

A method of evaluating investments by calculating the present value of all expected future cash flows, minus the initial investment cost.

Rate of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.