The Doyle Trust reports 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 payment of these
Amounts, the trustee is empowered to make additional distributions at its discretion. Exercising this authority, the trustee distributes an additional $25,000 to Roger and $25,000 to Sally. How much income from the trust must Sally recognize?

Question

Quizplus · Accepted Answer

Sally must recognize all the income that has been distributed to her from the trust. In this case, the trustee distributed $30,000 to her as required by the trust instrument, and an additional $25,000 at its discretion. Therefore, Sally must recognize a total of $55,000 of income from the trust.

The Doyle Trust Reports Distributable Net Income for the Year