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:

Cognition

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Age Groups

Categories of people classified according to their ages, often used in research and demographic studies to understand behavior and needs specific to those stages of life.

Gender

The range of characteristics pertaining to, and differentiating between, masculinity and femininity, often based on social and cultural differences rather than biological ones.

Donald Super

An American psychologist known for his theories on careers and vocational development.