This year, the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI). Nano distributed $60,000 cash to Horatio, its sole income beneficiary. Nano is a simple trust. Nano's distribution deduction is:

Question

Quizplus · Accepted Answer

The distribution deduction for a simple trust is limited to its distributable net income (DNI), which in this case is $40,000. This prevents the trust from deducting more than what is allocable to its income.

This Year, the Nano Trust Reported $50,000 Entity Accounting Income