Panther Trust Has Net Accounting Income and Distributable Net Income

question 56

Multiple Choice

Panther Trust has net accounting income and distributable net income of $100,000, $75,000 from taxable sources and $25,000 from tax-exempt sources. During the year, the trust makes a mandatory distribution to Julius and Steve of $50,000 each. The distribution deduction is

• A)$25,000.
• B)$50,000.
• C)$75,000.
• D)$100,000.

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Definitions:

Independent Events

Two events that have no influence on each other's occurrence, meaning the probability of one does not affect the other.

P(A And B)

The probability that events A and B both occur, which can be calculated directly or via the multiplication rule for independent events.

P(B|A)

The likelihood of event B happening after event A has already taken place.

Complement

The set or amount that completes something to a whole, usually in the context of sets in mathematics or the complement rule in probability.