J and Z, husband and wife, created a trust for J's aging mother, Betty.This year the trust received dividend income of $15,000 and distributed $10,000 to Betty.The taxable income of the trust and Betty is?
A)Trust $15,000, Betty $10,000
B)Trust $0, Betty $15,000
C)Trust $5,000, Betty $10,000
D)Trust $15,000, Betty $0
E)None of the above

Question

Quizplus · Accepted Answer

The trust received $15,000 in dividend income but only distributed $10,000 to Betty, leaving $5,000 in taxable income for the trust. Betty's taxable income is $10,000, which represents the portion of the distribution that was not from dividends.

J and Z, Husband and Wife, Created a Trust for J's