The Suarez Trust Generated Distributable Net Income (DNI) This Year

question 7

Multiple Choice

The Suarez Trust generated distributable net income (DNI) this year of $150,000, one-third of which was portfolio income, and the balance of which was exempt interest.Under the terms of the trust, Clara Suarez is to receive an annual income distribution of $30,000.At the discretion of the trustee, additional distributions can be made to Clara, or to Clark Suarez III.This year, the trustee's distributions to Clara totaled $90,000.Clark also received $90,000.How much of the trust's DNI is assigned to Clark?

• A)$0, only first-tier distributions are subject to Federal income tax.
• B)$72,000.
• C)$75,000.
• D)$90,000.

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