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:

Bowman Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney, which performs the first step in the filtration of blood to form urine.

Blood Colloid Osmotic Pressure

The pressure exerted by plasma proteins on the capillary walls, which helps to retain water within the circulatory system.

Net Filtration Pressure

The difference in pressure that drives the filtration of fluids across capillary walls, determined by hydrostatic and oncotic pressures.

Myogenic Mechanism

A feedback mechanism in which blood vessels respond to changes in blood pressure to maintain steady blood flow.