For the current taxable calendar year, the estate's distributable net income (DNI) is:
a) Estate's Income and Disbursements for the year:
Taxable interest = $20,000
Net long-term capital gains allocable to corpus = $10,000
Administrative expenses attributable to taxable income = $5,000
Therefore, DNI = $20,000 + $5,000 - $10,000 = $15,000
b) Lyon estate's distributable net income (DNI) is the income allocated to the beneficiaries of the trust created by Lyon before his death. The DNI is calculated with the trust's taxable income minus the capital gain or add the capital loss, and then adding the exemptions. The distributable net income is the maximum taxable amount received by a unitholder or a beneficiary.