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

question 64

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 amount of the distribution deduction?

• A) $45,000
• B) $30,000
• C) $40,000
• D) $15,000

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Definitions:

Negligent Misstatement

A false statement made carelessly rather than intentionally or deceitfully, leading to someone's loss or damage.

Negligent Misconduct

Behavior or actions that fall below the legally established standard of care, leading to unintended harm or damage.

Self-Governing

Having the authority or autonomy to govern oneself or manage one's own affairs without external control.

Professional Bodies

Organizations representing the interests of professionals in a specific industry, responsible for setting standards, providing training, and enforcing ethics.