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

question 49

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) $22,500
• D) $15,000

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Definitions:

Slow-To-Warm-Up

A temperament where individuals are hesitant in new situations but become more comfortable over time.

Temperament

An individual's innate disposition or personality, often observable from early childhood and influencing behavior and emotional reactions.

Uncrowded

Refers to a situation or environment that is not filled or packed with people, offering more space and less congestion.

Slow-To-Warm-Up

A temperament trait in some individuals characterized by a cautious, reflective approach to new experiences or strangers, often requiring more time to adjust.