A Simple Trust Has a Distributable Net Income (DNI)of $50,000

question 3

Multiple Choice

A simple trust has a distributable net income (DNI) of $50,000 and net accounting income of $60,000,all from taxable sources.The trust has a sole beneficiary,Marty.The trust reports on a calendar tax year and distributes the $60,000 of 2008's net accounting income to Marty on January 20,2009.No other distributions are made in the current year.Marty's taxable income from the trust this year is

• A)$0.
• B)$49,700.
• C)$50,000.
• D)$60,000.

---

Definitions:

Taxable Wages

Earnings from employment or other services that are subject to taxation, after accounting for deductions and exemptions.

Rev.Proc.87-56

A Revenue Procedure published by the IRS in 1987, providing guidelines on the depreciation of property for tax purposes.

Revenue Procedure

Official guidance from the IRS on the operational practices it follows, aiding in tax compliance and planning.

IRS Regulations

Rules and guidelines issued by the Internal Revenue Service governing the administration of tax laws in the United States.