Question 1

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-A trust that is required to distribute annual accounting income.

Accepted Answer

A simple trust is characterized by its requirement to distribute all its income annually to the beneficiaries, without the ability to accumulate income or make distributions out of principal.

Question 2

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-A trust whose income is taxed to the donor, not the beneficiaries.

Accepted Answer

A trust whose income is taxed to the donor is known as a Grantor Trust.

Question 3

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-The person who transfers assets to a trust.

Accepted Answer

The person who transfers assets to a trust is commonly known as the grantor.

Question 4

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-A trust that can accumulate, rather than distribute, its accounting income.

Accepted Answer

A Complex Trust can accumulate income instead of distributing it, unlike a Simple Trust which must distribute all its income within the tax year.

Question 5

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-The fiduciary in charge of a trust.

Accepted Answer

The proper term for the person in charge of a trust is a trustee.

Question 6

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-A trust that might be used to reduce probate costs, but not Federal estate and gift tax.

Accepted Answer

The answer of For each of the following items, insert...

Question 7

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-The fiduciary in charge of an estate.

Accepted Answer

An executor is a person appointed by a decedent's will to carry out the instructions and wishes of the deceased in relation to the estate. They are a fiduciary in charge of managing and distributing the estate.

Question 8

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase.
-A trust whose remainder beneficiary is its grantor.

Accepted Answer

A reversionary trust is one where the assets revert back to the grantor upon the termination of the trust.

Quiz 28: Income Taxation of Trusts and Estates

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -A trust that is required to distribute annual accounting income.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -A trust whose income is taxed to the donor, not the beneficiaries.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -The person who transfers assets to a trust.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -A trust that can accumulate, rather than distribute, its accounting income.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -The fiduciary in charge of a trust.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -A trust that might be used to reduce probate costs, but not Federal estate and gift tax.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -The fiduciary in charge of an estate.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. -A trust whose remainder beneficiary is its grantor.