The Suarez Trust Generated Distributable Net Income (DNI) This Year

question 54

Multiple Choice

The Suarez Trust generated distributable net income (DNI) this year of $150,000, two-thirds of which was portfolio income, and the balance of which was exempt interest. Under the terms of the trust, Clara Suarez is to receive an annual income distribution of $30,000. At the discretion of the trustee, additional distributions can be made to Clara, or to Clark Suarez III. This year, the trustee's distributions to Clara totaled $60,000. Clark received $90,000. How much of the trust's DNI is assigned to Clark?

• A) $0, only first-tier distributions are subject to Federal income tax.
• B) $60,000.
• C) $75,000.
• D) $90,000.

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Definitions:

Cognitive Processing

The mental actions or methods involved in acquiring knowledge and understanding through thought, experience, and the senses.

Persuasion Routes

The methods or approaches used to change people's attitudes or behaviors, typically categorized as central and peripheral routes.

Direct Route

The most straightforward or shortest path from one point to another without detours or interruptions.

Source Persuasiveness

relates to the effectiveness and credibility of a communicator in influencing the beliefs, attitudes, or behaviors of others.