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 might be used to reduce probate costs, but not Federal estate and gift tax.

Accepted Answer

A living trust can help reduce probate costs, but it does not reduce Federal estate and gift taxes.

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 remainder beneficiary is its grantor.

Accepted Answer

A reversionary trust is one where the remainder interest is retained by the grantor.

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.
-A trust whose income is taxed to the donor, not the beneficiaries.

Accepted Answer

A trust whose income is taxed to the donor, not the beneficiaries is known as a grantor trust.

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.
-The fiduciary in charge of a trust.

Accepted Answer

The best term for the fiduciary in charge of a trust is a trustee.

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.
-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 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.
-The fiduciary in charge of an estate.

Accepted Answer

An executor is the person appointed to manage the estate of a decedent (deceased person).

Quiz 20: 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 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. -A trust whose remainder beneficiary is its grantor.

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 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 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 an estate.