Question

In computing distributable net income (DNI) for a trust, one removes any net capital gain or...

In computing distributable net income (DNI) for a trust, one removes any net capital gain or loss that is allocable to income.

a. True

b. False

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Homework Answers

Answer #1

Answer

TRUE

Explanation:

Distributable net income (DNI) is the income that is used to allocate the income between the truth and the beneficiaries of the trust.

Distributable net income (DNI) for a trust is calculated as follows:

DNI =  Taxable Income - Capital Gains + Capital Losses + Tax Exemptions + Dividends - Fees

So, it is clear that the calculation of DNI requires the removal of any capital gains or losses.

Hence, the statement given in the question is correct.

In case of any doubt or clarification, you're welcome to come back via comments.

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