Question

The distributable net income (DNI) of a fiduciary taxpayer: a.Marks the maximum amount of gross income that income beneficiaries must report when receiving distributions. b.Specifies the character of the distributions in the hands of the year's income beneficiaries. c.Constitutes the maximum amount for the fiduciary's distribution deduction. d.All of these choices are correct.

Answer 1

Answer: d. All of these choices are correct.

Step-by-step explanation:

The Distributable Net income is the taxable income acquired by a person who is a beneficiary to a trust from that trust. It is therefore the maximum amount that they should report for taxation purposes when they receive distributions from their trusts.

It also specifies the character of the distribution and is the maximum amount that the fiduciary can deduct for distribution income purposes from their taxable income.