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Net income is defined in the tax laws to mean net income as calculated for tax purposes. Income is not defined. To apply section 97 it is necessary to know what the income of the trust is and what a beneficiaryâs share of that income is.
In broad terms, net income, which arises from the conduct of the taxpayerâs trade or business operations, is business income. R&TC Â§25120(a) defines business income as: income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income arising from tangible and