Question

A simple trust had $25,000 in capital gains, $10,000 in municipal interest, $5,000 in corporate bond interest, and $2,000 in accounting and trustee fees. According to the trust agreement, capital gains are to be distributed to the beneficiary. What is the distributable net income for this trust?

Answer 1

Answer:

$38,000

Explanation:

Given:

Capital gains = $25,000

Municipal interest = $10,000

Corporate bond interest = $5,000

Accounting and trustee fees = $2,000

Now,

The distributable net income for this trust

= Capital gains + Municipal interest + Corporate bond interest - Accounting and trustee fees

= $25,000 + $10,000 + $5,000 - $2,000

= $38,000