To Reduce Trustee Commissions, the Sigrid Trust Is Operated as Though

question 115

Multiple Choice

To reduce trustee commissions, the Sigrid Trust is operated as though it were two trusts (i.e., with 70-year-old Grandma and 7-year old Skippy each holding equal shares) .This year the trust generated distributable net income (DNI) of $80,000.The Sigrid trustee distributed $100,000 to Grandma this year: $40,000 as her one-half share of the entity's income, and $60,000 as a distribution of principal.Skippy received no distribution. How much of the year's distributable net income is assigned to Grandma?

• A)$40,000.
• B)$50,000.
• C)$80,000.
• D)$100,000.