A Trust Has Net Accounting Income and Distributable Net Income

question 99

Multiple Choice

A trust has net accounting income and distributable net income (DNI) of $60,000, all from taxable sources. The trustee is required to distribute $40,000 of current income to Harry. In addition, the trustee makes a discretionary distribution to Harry of $10,000 and a discretionary distribution to Susan of $30,000. $20,000 of the $40,000 total discretionary distributions is from corpus. Gross income reportable by Harry is

• A)$50,000.
• B)$45,000.
• C)$37,500.
• D)$30,000.

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Definitions:

Revenue

The total income generated by a company from its business activities, such as sales of goods or services, before any expenses are deducted.

Adjusting Entries

Entries in the ledger at the finish of an accounting cycle to assign earnings and outlays to the epoch in which they genuinely transpired.

Calendar Year

A period of 365 days (366 in a leap year) starting from January 1st to December 31st, used as a financial or operational year by some organizations.