Apple Trust Reports Net Accounting Income of $40,000, All from Taxable

question 4

Multiple Choice

Apple Trust reports net accounting income of $40,000, all from taxable sources. The trustee is required to distribute $15,000 annually to Megan. The trustee also makes discretionary distributions of $30,000, $7,500 to Megan and $22,500 to Caroline. The trust pays $5,000 of the discretionary distributions from corpus. What is the taxable amount of the Megan's tier-2 distribution?

• A)$7,500
• B)$6,250
• C)$15,000
• D)$22,500

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Definitions:

Real Consequences

The tangible, actual outcomes or effects resulting from specific actions, events, or decisions, which can have significant impact on individuals or communities.

Unintended Consequences

Outcomes that are not foreseen or intended by a purposeful action, often discussed in economics, social policy, and other fields.

Functionalist Theorists

Focus on how society maintains stability and order, viewing each part of society as functioning to maintain the whole.

Latent Functions

The unintended consequences of an action or social pattern.