Income that is flowed through a trust retains its tax characteristics (e.g., a dividend earned by the trust can be allocated to a beneficiary as a dividend).

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This is true. Income earned by a trust is typically distributed to beneficiaries and retains its tax characteristics, meaning it is taxed at the individual beneficiary's tax rate. For example, if a trust earned a dividend, that dividend could be allocated to a beneficiary as a dividend and taxed at the beneficiary's individual tax rate.

Income That Is Flowed Through a Trust Retains Its Tax