The Roz Trust Has Distributable Net Income for the Year

question 98

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 paying these amounts, the trustee is empowered to make additional distributions at its discretion. Exercising this authority, the trustee distributes an additional $10,000 to Roger and $30,000 to Sally. How much gross income from the trust must Roger recognize?

• A) $60,000.
• B) $50,000.
• C) $40,000.
• D) $30,000.

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