Capital gains allocable to corpus

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  • #184865
    Anonymous
    Inactive

    Lyon, a cash-basis taxpayer, died on January 15, 2013. In 2013, the estate executor made the required periodic distribution of $9,000 from estate income to Lyon’s sole heir. The following pertains to the estate’s income and disbursements in 2013:

    2013 Estate Income

    $20,000 Taxable interest

    10,000 Net long-term capital gains allocable to corpus

    2013 Estate Disbursements

    $5,000 Administrative expenses attributable to taxable income

    For the 2013 calendar year, what was the estate’s distributable net income (DNI)?

    a. $15,000

    b. $20,000

    c. $25,000

    d. $30,000

    (a) DNI would be net income $25,000 ($20,000 + $10,000 – $5,000) minus $10,000 net capital gains allocable to corpus, which equals $15,000.


    Why add the 10,000 net capital gains allocable to corpus if it’s just going to be subtracted right back out?

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  • #609598
    seattleacct
    Member

    It's just telling you what's included in Net Income. The capital gains is part of net income, but not part of the amount that would be considered DNI.

    B:76
    A:64, 73, 91!
    R:77
    F:76

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    #609599
    Anonymous
    Inactive

    What about the 9000 that was distributed?

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