which is true regarding dni and a complex trust the income d

which is true regarding dni and a complex trust the income distribution is limited to greater of dni dni is increased by tax exempt income if dni limits the distribution it will be absorbed by tier 1 distributions first any amounts paid over and above the required distributions are considered tier ii distibutions and reduce dni.

Solution

Solution: if dni limits the distribution it will be absorbed by tier 1 distributions first

Explanation: Distribution on tier ii includes remaining distributable net income from tieri-i, thus DNI absorbs the first tier of distributions before the second tier