Taxable Income from Trusts & Estates Practice Test

The Manor Trust, a complex trust, had distributable net income (DNI) in Year 7 of $12,000. Of the $12,000 of DNI, $5,000 was distributed to trust beneficiaries. Of the $5,000 distributed, which taxpayer(s), if any, are responsible for the tax liability on the $5,000 distribution?

A distribution to an estate’s sole beneficiary for the current calendar year equaled $15,000, the amount currently required to be distributed by the will. The estate’s current year records were as follows:

• Estate income: $40,000 Taxable interest
• Estate disbursements: $34,000 Expenses attributable to taxable interest

What amount of the distribution was taxable to the beneficiary?