Question

A distribution to an estate's sole beneficiary for the calendar year equaled $15,000, the amount currently required to be distributed by the will. The estate's records showed the following. What amount of the distribution was taxable to the beneficiary?

Estate income

Taxable interest $40,000

Estate disbursements

Expenses attributable to taxable interest $34,000


a. $15,000
b. $0
c. $6,000
d. $40,000

Answer 1

Answer: c. $6,000

Explanation:

The taxable distribution amount to the beneficiary is limited to the net income attributable to taxable interest which in this case is;

= Taxable interest - expenses

= 40,000 - 34,000

= $6,000