The trust instrument provides that Tamara,the sole income beneficiary,is to receive $30,000 annually.If trust accounting income is not sufficient to pay this amount,the trustee is empowered to invade corpus to the extent necessary.During the current year,the trust has distributable net income (DNI)of $100,000,including $20,000 of tax-exempt interest.In accordance with the trust instrument,$30,000 is paid to Tamara.How much income is taxable to Tamara for the current year?

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Tamara is entitled to receive $30,000 annually, and the trust instrument allows the trustee to invade corpus if trust accounting income is insufficient to make the payment. In the current year, the trust has DNI of $100,000, and $30,000 is paid to Tamara, leaving $70,000 of undistributed income. Since the trust has tax-exempt interest income of $20,000, the taxable income of the trust is $80,000 ($100,000 - $20,000). Tamara's taxable income from the trust is equal to the distribution received, which is $30,000. However, $6,000 of the distribution ($30,000 - $24,000) represents tax-exempt income, which is not taxable to Tamara. Therefore, Tamara's taxable income from the trust is $24,000 ($30,000 - $6,000).

The Trust Instrument Provides That Tamara,the Sole Income Beneficiary,is to Receive