The Doyle Trust Reports Distributable Net Income for the Year

question 70

Multiple Choice

The Doyle Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources. Under the terms of the trust instrument, the trustee must distribute $20,000 to Roger and $20,000 to Sally. After paying these amounts, the trustee is empowered to make additional distributions at its discretion. Exercising this authority, the trustee distributes an additional $25,000 to Roger and $50,000 to Sally. How much gross income from the trust must Roger recognize?

• A) $50,000
• B) $45,000
• C) $40,000
• D) $20,000

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Definitions:

Presumptive Method

A technique or approach that assumes certain outcomes or conditions as a basis for further discussion or analysis.

Negative Bargaining Range

Situations in negotiations where the minimum acceptable outcome for one party is less favorable than the maximum offer by the other party.

Positive Settlement Range

A range in negotiation where the terms agreed upon are acceptable to all parties involved, often leading to a mutually beneficial outcome.

Bargaining Range

The spectrum of possible agreements in a negotiation, bounded by the respective parties’ resistance points.