List the Three Major Functions of Distributable Net Income (DNI)

question 127

Essay

List the three major functions of distributable net income (DNI) as that amount is used under Federal income tax law.

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Definitions:

Capital Investment

Funds invested in a firm or enterprise for the purpose of furthering its business objectives, including acquiring assets and launching new ventures.

Liquidating Dividend

A payment made by a corporation to its shareholders from its capital rather than its earnings, often signaling the winding down or dissolution of the company.

Cash Payment

A transaction in which goods or services are paid for with physical currency or through an immediate electronic funds transfer.

Firm's Assets

The economic resources owned by a business, including cash, property, equipment, and intellectual property, which are used to generate revenue.