A Trust Has Distributable Net Income (DNI)of $50,000, Including $30,000

question 74

Essay

A trust has distributable net income (DNI)of $50,000, including $30,000 tax-exempt interest income and $20,000 taxable interest income. The trust instrument requires that all income be distributed at least annually, 30% to Jane and 70% to Joe. What is the amount and character of the income that Jane receives?

---

Definitions:

Social Security Retirement Benefit

A government payment program that provides financial assistance to people who are retired from work.

Monthly Benefit

A regular payment received each month, such as from a pension or Social Security, designed to cover living expenses.

COLA

Cost-of-Living Adjustment; an increase in income or benefits designed to offset inflation and maintain purchasing power.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate inflation.