Harry, the sole income beneficiary, received a $40,000 distribution from the Lucy Trust in a year when the trust's distributable net income was $50,000. Harry's AGI increases by $40,000.

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Harry's adjusted gross income (AGI) increases by the amount of the distribution he received from the trust, which is $40,000, reflecting the income passed through to him as the beneficiary.

Harry, the Sole Income Beneficiary, Received a $40,000 Distribution from the Lucy