A Simple Trust Has a Distributable Net Income (DNI)of $50,000

question 3

Multiple Choice

A simple trust has a distributable net income (DNI) of $50,000 and net accounting income of $60,000,all from taxable sources.The trust has a sole beneficiary,Marty.The trust reports on a calendar tax year and distributes the $60,000 of 2008's net accounting income to Marty on January 20,2009.No other distributions are made in the current year.Marty's taxable income from the trust this year is

• A)$0.
• B)$49,700.
• C)$50,000.
• D)$60,000.

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Definitions:

Basic Unit

The smallest, fundamental component or building block of a system or structure.

Metric System

A decimal system of weights and measures based on the meter, liter, and gram as units of length, capacity, and weight or mass, respectively.

Drug

A substance used in the diagnosis, treatment, or prevention of diseases, capable of affecting physical or mental functions.

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A continuous area or expanse that is free, available, or unoccupied; also the physical universe beyond the earth's atmosphere.