True or False Indicate which of the following statements are true or false by circling the correct answer. T F 1. T F 2. T F 3. T F 4. T F 5. T F 6. F 7. T F 8. T F 9. T F 10. 10 T F 11. Distributable net income does not include net tax-exempt interest. The distribution deduction is limited to the distributable net income (DNI) of the entity (less any net tax-exempt income that is included in distributable net income), or the amount distributed during the year. Depreciation deductions are allocated to trust beneficiaries on their ratable portion of DNI received. If the fiduciary elects, a trust or estate may recognize gain or loss on an in-kind property distribution that is not a specified gift, bequest, or charitable contribution. The first step in determining the taxable income of a trust or estate is to compute the entity's distribution deduction. A beneficiary must include in his or her taxable income the amount of accounting income actually received during the year. Trusts and estates are required to use a calendar tax year. If the trustee can determine, within guidelines included in the trust document, the timing of income or corpus distributions, the trust is referred to as a reversionary trust. The personal exemption allowed for all complex trusts is $100. Estates and complex trusts are not subject to a limitation on the extent of their deductible charitable contributions for a given year. The assets of the estate are identical to the decedent's assets that are subject to the federal estate tax.