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

question 4

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)$15,000
• D)$22,500

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Definitions:

Kohlberg's Moral Development Theory

A theory that proposes individuals progress through different stages of moral reasoning, from basic obedience to societal rules to higher-level ethical principles.

Conventional Level

A stage in moral development proposed by Lawrence Kohlberg, where an individual's sense of morality is tied to personal and societal relationships, and compliance with laws and norms.

Terminal Values

Fundamental goals or end-states that individuals strive to achieve in their lives, guiding their actions and judgments.

Instrumental Values

Values that influence the means to achieving an end, such as ambition and efficiency, guiding how we achieve our goals.