This year, the Suarez Trust generated distributable net income (DNI) of $150,000, two-thirds of which was portfolio income, and the balance of which was exempt interest. Under the terms of the trust, Clara Suarez is to receive an annual income distribution of $30,000. At the discretion of the trustee, additional distributions can be made to Clara or to Clark Suarez III. This year, the trustee's distributions to Clara totaled $60,000. Clark received $90,000. How much of the trust's DNI is assigned to Clara?

Question

Quizplus · Accepted Answer

Clara's DNI assignment is based on the actual distribution she received, which is $60,000. The trust's DNI is allocated to beneficiaries based on the distributions they receive, up to the amount of the DNI. Since Clara received $60,000, and this amount is within the trust's DNI, her assigned DNI is $60,000.

This Year, the Suarez Trust Generated Distributable Net Income (DNI)