A Trust Has Net Accounting Income of $30,000, but Distributable

question 30

Multiple Choice

A trust has net accounting income of $30,000, but distributable net income (DNI) of only $25,000 because certain expenses are charged to principal. The trust is required to distribute $10,000 to Alice and it makes a discretionary distribution of $20,000 to Ben. The trust has no tax-exempt income. The amount that Ben reports as gross income is

• A)$20,000.
• B)$16,667.
• C)$15,000.
• D)none of the above

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