The Nixon Trust Has Distributable Net Income for the Year

question 6

Multiple Choice

The Nixon Trust has distributable net income for the year of $300,000 and no income from tax-exempt sources.Under the terms of the trust instrument, the trustee must distribute $75,000 to Harrison and $225,000 to Patsy.After paying these amounts, the trustee is empowered to make additional distributions at its discretion.Exercising this authority, the trustee distributes an additional $30,000 to Harrison and $30,000 to Patsy.How much gross income from the trust must Harrison recognize?

• A)$300,000.
• B)$225,000.
• C)$212,500.
• D)$75,000.
• E)$30,000.

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