The Gable Trust reports $20,000 business income and $10,000 exempt interest income, and it paid a $3,000 fiduciary fee. Gable's distributable net income includes $10,000 of net-tax interest income.

Question

Quizplus · Accepted Answer

Distributable Net Income (DNI) for a trust includes business income and exempt interest income but does not include the fiduciary fee deduction. Therefore, the correct DNI calculation should include the $20,000 business income and the $10,000 exempt interest income, without subtracting the fiduciary fee for the purpose of determining DNI components. The statement incorrectly suggests that only net-tax interest income is included in DNI.

The Gable Trust Reports $20,000 Business Income and $10,000 Exempt