Karly created a $300,000 trust that provided her mother with a lifetime income interest starting on January 1, with the remainder to go to her son. Karly expressly retained the power to revoke both the income and remainder interests at any time. Who will be taxed on the trust's income?

Question

Quizplus · Accepted Answer

Karly will be taxed on the trust's income because she retained the power to revoke the trust, making her the grantor and thus responsible for the tax on the trust's income.

Karly Created a $300,000 Trust That Provided Her Mother with a Lifetime