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This year, the Nano Trust reported $50,000 of trust accounting income, $75,000 in taxable income before...

This year, the Nano Trust reported $50,000 of trust accounting income, $75,000 in taxable income before distribution deduction, no tax-exempt income and $60,000 in distributable net income (DNI). Also during this year, Nano actually distributed $30,000 cash to Horatio, its sole income beneficiary. Nano is a simple trust. Nano’s distribution deduction is:

a.         $60,000.

b.         $50,000.

c.         $30,000.

d.         $40,000.

e.         $70,000.

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Answer #1

Answer : option (a)

$60000.

Explanation : the distribution deduction of a simple trust is always equal to its DNI(distributable net income).

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