Question

The DNI for the Sampson estate is 20000 including 3000 I’d ask tax exempt int income If the executor distributes 8000 to the beneficiaries in a year other than the final year what amount may be taken as a distribution deduction

Answer 1

In the given question it is given as the distributable net income of the estate is $20,000 and it includes exempted interest income after adjusting with tax of $3,000. It paid to the beneficiaries $8,000, the distributive deduction in the question is the amount paid to the beneficiaries in proportion to the taxable income of the trust.

Taxable income would be $17,000 and exempt interest income is $3,000, if the distribution is divided in the ratio of the same, the distributive deduction would be $6,800.

= ($8,000 × {$17,000 ÷ $20,000} ) = $6,800.