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:

Two-person Career

A partnership where one person's career is directly supported by another's labor, often seen in professional and domestic settings.

Community Service

Voluntary work intended to help people in a particular area.

Extra Income

Money earned from a source other than one's primary job, often through part-time work, investments, or side projects.

Complete Care

A holistic approach to healthcare that addresses all aspects of a patient's needs, including physical, psychological, and social.