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.

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Definitions:

Process Distribution

Refers to the statistical distribution characteristic of the outcomes of a random process or the variation in a series of processes over time.

Mean

The mean of a collection of numbers, determined by dividing their total sum by the number of elements within the collection.

Statistical Method

A mathematical approach used for analyzing statistical data, often for the purpose of making conclusions from the data.

Hypothesis Test

A statistical procedure that uses data derived from a sample to investigate a hypothesis related to a population's parameter.