This Year, the Nano Trust Reported $50,000 Entity Accounting Income

question 153

Multiple Choice

This year, the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI) . Nano distributed $30,000 cash to Horatio, its sole income beneficiary. Nano is a complex trust. Nano's distribution deduction is:

• A) $50,000.
• B) $40,000.
• C) $30,000.
• D) $0. Because the distributions of a complex trust are discretionary, no deduction is allowed.

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Definitions:

De Jure Corporation

refers to a corporation that is legally incorporated and recognized by the state, fulfilling all statutory requirements.

Breach of Contract

The violation of any of the agreed-upon terms and conditions of a binding contract.

Defense to Payment

Legal defenses that a debtor may raise to avoid the obligation to pay a debt or claim.

Shareholder Sells

The process whereby an owner of shares in a corporation disposes of their stock to another party.