A Trust Has Net Accounting Income and Distributable Net Income

question 99

Multiple Choice

A trust has net accounting income and distributable net income (DNI) of $60,000, all from taxable sources. The trustee is required to distribute $40,000 of current income to Harry. In addition, the trustee makes a discretionary distribution to Harry of $10,000 and a discretionary distribution to Susan of $30,000. $20,000 of the $40,000 total discretionary distributions is from corpus. Gross income reportable by Harry is

• A)$50,000.
• B)$45,000.
• C)$37,500.
• D)$30,000.

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Definitions:

Hilgard

Ernest R. Hilgard was a prominent psychologist known for his research on hypnosis and pain control.

Psychoactive Drugs

Substances that affect the mind, mood, or behavior by altering the chemical processes in the brain.

Insomnia

A sleep disorder characterized by difficulty falling asleep, staying asleep, or experiencing restorative sleep, leading to daytime impairment.

Barbiturate

A class of drugs derived from barbituric acid, acting as a central nervous system depressant, used for sedation, anesthesia, or to treat seizures.