The net operating loss deduction a. cannot exceed 20% of the estate’s or trusts DNI.

41.     Which of the following is not part of accounting principal

a.       original trust/estate assets.

b.       capital gains.

c.        stock dividends.

d.       return of capital.

42.     The trustee of Bill’s trust is required to pay to Bill’s wife $20,000 per year and, at the trustee’s discretion, may distribute trust income or principal to the other trust beneficiary, Bill’s son. In 2016 the trustee has DNI of $40,000. The trustee distributes $20,000 to Bill’s wife and $50,000 to Bill’s son. How much is Bill’s son taxed on for 2016?

a.       $25,000

b.       $20,000

c.        $10,000

d.       $15,000