Panther Trust has net accounting income and distributable net income of $100,000, $75,000 from taxable sources and $25,000 from tax- exempt sources. During the year, the trust makes a mandatory distribution to Julius and Steve of $50,000 each. The distribution deduction is

Question

Quizplus · Accepted Answer

The distribution deduction is equal to the total distributable net income, which in this case is $100,000. Since $75,000 of the total distributable net income is from taxable sources, the distribution deduction is limited to this amount. Therefore, the correct answer is B ($75,000).

Panther Trust Has Net Accounting Income and Distributable Net Income