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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.
What is 'Distributable Net Income - DNI' Distributable net income (DNI) is used to allocate income between a trust and its beneficiaries. According to U.S. tax code: To prevent double taxation on income, estates and trusts are allowed to deduct the lesser of distributable net income or the sum of the trust income required to be distributed and other amounts âproperly paid or credited or required to be distributedâ to beneficiaries.