A Trust Has Net Accounting Income of $30,000, but Distributable

question 30

Multiple Choice

A trust has net accounting income of $30,000, but distributable net income (DNI) of only $25,000 because certain expenses are charged to principal. The trust is required to distribute $10,000 to Alice and it makes a discretionary distribution of $20,000 to Ben. The trust has no tax-exempt income. The amount that Ben reports as gross income is

• A)$20,000.
• B)$16,667.
• C)$15,000.
• D)none of the above

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Definitions:

Kotter

John P. Kotter is a professor and author known for his work on leadership and change management, including a popular 8-step process for leading change.

Bass

Refers to a key theory or individual notable in leadership or musical fields, requiring context for a specific definition.

Emergent

Refers to processes or patterns that arise spontaneously or naturally within systems or organizations, not due to a specific plan.

Trait

A distinguishing quality or characteristic, typically one belonging to a person.