This year, the Huang Trust distributed all of its accounting income and $1,000 from corpus.Huang's taxable income for the year is:

Question

Quizplus · Accepted Answer

The distribution of $1,000 from corpus is considered a return of principal and is not taxable. Therefore, the only taxable income is the accounting income that was distributed, which was all distributed. Since the accounting income distributed exceeded the corpus distribution by $100, the taxable income is negative $100.

This Year, the Huang Trust Distributed All of Its Accounting