Deciphering DNI In a Unitrust WorldDeciphering DNI In a Unitrust World
Distributable net income (DNI) has long been a complicated concept for fiduciaries, who in making distributions must consider the income tax consequences to both the trust or estate and its beneficiaries. When fiduciaries also must contend with the interplay of capital gains and DNI, the situation can become murky, indeed. The rise of total return theory in trust investing has led many jurisdictions
January 1, 2007
Jeremy T. Ware, associate, Arnall Golden Gregory LLP, Atlanta
Distributable net income (DNI) has long been a complicated concept for fiduciaries, who — in making distributions — must consider the income tax consequences to both the trust or estate and its beneficiaries. When fiduciaries also must contend with the interplay of capital gains and DNI, the situation can become murky, indeed. The rise of total return theory in trust investing has led many jurisdictions to adopt unitrust conversion statutes as well as the Uniform Principal and Income Act.1 That means more unitrusts and unitrust conversions across the country — and more fiduciaries grappling with complex capital gains and DNI issues.
The Internal Revenue Service has issued regula...
Unlock All Access Premium Subscription
Get Trusts & Estates articles, digital editions, and an optional print subscription. Choose your subscription now and dive into expert insights today!
Already Subscribed?
