The Roz Trust Has Distributable Net Income for the Year

question 89

Multiple Choice

The Roz Trust has distributable net income for the year of $100,000 and no income from tax-exempt sources. Under the terms of the trust instrument, the trustee must distribute $30,000 to Roger and $30,000 to Sally. After payment of these amounts, the trustee is empowered to make additional distributions at its discretion. Exercising this authority, the trustee distributes an additional $40,000 to Roger and $40,000 to Sally. How much income from the trust must Sally recognize?

• A) $90,000.
• B) $60,000.
• C) $50,000.
• D) $40,000.

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Definitions:

McClelland

A reference to David McClelland, an American psychologist known for his work on motivation needs theory, including the needs for achievement, affiliation, and power.

Behavior Modification

The use of empirical and operant conditioning techniques to change or adjust unhealthy or undesirable behaviors.

Criticism

The practice of analyzing, judging, and/or evaluating something, often with the intention of revealing faults or areas of improvement.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to perform if they believe that their efforts will lead to desired performance and reward.