Distributable Net Income - DNI

What is 'Distributable Net Income - DNI'

DIstributable net income (DNI), in the case of an income trust, is an amount that is transferable to unitholders. In the case of an estate trust, the amount to be distributed to a beneficiary. Distributable net income is the maximum amount received by a unitholder or a beneficiary that is taxable; any amount above this figure will be tax free.

BREAKING DOWN 'Distributable Net Income - DNI'

Distributable net income is seen as a close estimate of the true economic value the distribution would provide, but the actual amount paid out to those designated will most likely vary. At times, DNI is paid out to minimize the tax burden levied on the trust itself, and it can also provide a steady income to a beneficiary or a unitholder.

RELATED TERMS
  1. Unitholder

    An investor who owns one or more units in an investment trust. ...
  2. Cash Distribution Per Unit - CDPU

    A measure, used in Canada, that refers to the amount of cash ...
  3. Distribution

    1. When trading volume is higher than that of the previous day ...
  4. Charitable Lead Trust

    A trust designed to reduce beneficiaries' taxable income by first ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Beneficiary Of Trust

    A beneficiary of trust is a person for whom a trust was created, ...
Related Articles
  1. Financial Advisor

    Passing an IRA to a Trust: The Good and Bad

    Creating a trust is a common estate planning tactic, but naming a beneficiary to an IRA to a trust may have unintended consequences.
  2. Managing Wealth

    Trusts: Prevent Beneficiary Designation Mishaps

    Wills and revocable trusts are the cornerstone of estate planning, learn how you may spend considerable time and money maintaining these documents.
  3. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  4. Personal Finance

    Who is a Beneficiary?

    A beneficiary is a person or entity that receives funds, assets, property or other benefits from a trust, will, or life insurance policy.
  5. Financial Advisor

    Estate Planning Tips for Tax-Deferred Investments

    Bequeathing assets in tax-deferred investments can be tricky. Here are some of the pitfalls and how to avoid them.
  6. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  7. Retirement

    Which Retirement Plans Need a Family Trust?

    Many people think family trusts are only for the very wealthy, but if your retirement assets exceed $500,000, you may want to consider the option.
  8. Personal Finance

    Encouraging Good Habits With An Incentive Trust

    Money can be a powerful motivator - why not use it to teach your heirs positive lessons?
  9. Managing Wealth

    What's a Trust?

    A trust is a fiduciary relationship in which one party gives another party the right to hold property or assets on behalf of a beneficiary.
  10. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
RELATED FAQS
  1. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ... Read Answer >>
  2. Do beneficiaries of a trust pay taxes?

    Learn how interest income from a trust is taxed, and understand when this money is taxable to the trust and when it is taxable ... Read Answer >>
  3. Will I have to pay taxes every year when I receive the $25,000 from my trust fund?

    My inheritance is in the form of a trust fund that distributes $25,000 per year for 10 years. ... Read Answer >>
  4. What percentage of withdrawals from a trust fund is taxed?

    I have inherited a trust fund. This is the first time I have considered pulling money from the account.  ... Read Answer >>
  5. Do I have to pay taxes on income generated from a trust?

    I never received a distribution for the amount listed as real estate income  Read Answer >>
  6. What are the keys to setting up a trust fund?

    Setting up a trust to secure your assets for a beneficiary allows you to set the terms under which the beneficiaries are ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center