Distributable Net Income (DNI)

Allocating Taxable Income

Distributable Net Income (DNI) is a key trust taxation concept. DNI generally limits both the trust's deduction for distributions and the amount of income beneficiaries must include on their tax returns.

Note

DNI prevents trust income from being taxed twice while ensuring it is taxed once either to the trust or the beneficiary.

Summary

Distributable Net Income is central to understanding trust income taxation.