The Jiang Trust operates a manufacturing business. Yan created the trust several years ago by contributing a successful sole proprietorship. The trust distributed one-half of its DNI this year to Yan. Yan can retain all of the trust's depreciation deductions if:

Question

Quizplus · Accepted Answer

The correct answer is C because when depreciable assets are contributed to a trust by the settlor (in this case, Yan), the trust can allocate depreciation deductions to the settlor. This is based on the principle that the person who contributed the asset (and thus, indirectly, the depreciation deductions) can retain those deductions. The other options do not directly relate to the ability to retain depreciation deductions based on the contribution of assets to the trust.

The Jiang Trust Operates a Manufacturing Business