Panther Trust has net accounting income and distributable net income of $100,000, $75,000 from taxable sources and $25,000 from tax-exempt sources. During the year, the trust makes a mandatory distribution to Julius and Steve of $50,000 each. The distribution deduction is

Question

Quizplus · Accepted Answer

The distribution deduction is limited to the lesser of the distributable net income (DNI) or the actual distributions made. Here, the DNI is $75,000, which is less than the total distributions of $100,000, so the deduction is $75,000.

Panther Trust Has Net Accounting Income and Distributable Net Income