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 is computed net of the full $3,000 deduction for the fees.

Question

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The fiduciary fee of $3,000 is deductible when computing distributable net income, so it is subtracted from the total income before calculating the distributable net income. Therefore, the Gable Trust's distributable net income would be based on $20,000 of business income and $10,000 of exempt interest income, less the $3,000 fiduciary fee, which equals $27,000.

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