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. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
Related Articles
  1. Professionals

    Trust Income

    Trust Income
  2. Mutual Funds & ETFs

    Taxes

    Taxes
  3. Professionals

    Types, Features And Taxation Of Trusts

    Types, Features And Taxation Of Trusts
  4. Professionals

    General Issues

    General Issues
  5. Financial Advisors

    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.
  6. Professionals

    Trust Beneficiaries: Income and Remainder

    Trust Beneficiaries: Income and Remainder
  7. Professionals

    Simple / Complex Trusts

    Simple / Complex Trusts
  8. Retirement

    The Complete Guide To Retirement Planning For 50-Somethings: Beneficiary and Estate Planning

    Beneficiary DesignationsIt is possible that you will not spend all of the funds that you save in your retirement nest egg. As such, you should make plans to ensure proper disposal of those assets, ...
  9. Professionals

    Sample Questions 1 - 5

    Sample Questions 1 - 5
  10. Professionals

    Types and Basic Provisions

    Types and Basic Provisions
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. 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 >>
  4. Are estate distributions taxable?

    Discover how estates are taxed, why estate distributions are generally tax-free, and circumstances that may require an heir ... Read Answer >>
  5. What are the pros/cons of naming a trust as the beneficiary of a retirement account?

    This has been the topic of an ongoing debate in the financial community between estate planning attorneys and financial advisors. ... Read Answer >>
  6. How do I list the beneficiaries of my life insurance policies if I have a trust? ...

    Because most states protect life insurance policies from creditors, most buyer questions come from the confusion created ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center