A staff employee for the CPA firm of O’Brien, Leahy, and Sweeney is currently preparing Form 1041 as an income tax return for an estate. The staff employee knows that the estate is allowed a deduction for income distributions to beneficiaries up to the amount of the estate’s distributable net income (DNI) for the period. However, the employee is not certain how to compute the exact amount of this deduction. Go to the Web site www.irs.gov. Do a search for “Instruction 1041” to get the instruction information for estate and trust income taxes published by the IRS.

Required
Read the information provided, and write a memo to the employee explaining (in general terms) how to calculate this deduction.