Income trusts are structured such that income is taxed in the hands of the:
A) income trust.
B) operating entity.
C) unitholders.
D) there is no tax on income trusts.

Question

Quizplus · Accepted Answer

Income trusts are structured to distribute their income to unitholders, where it is then taxed in the hands of the unitholders, rather than at the level of the trust itself. This allows for a flow-through of income, avoiding double taxation.

Income Trusts Are Structured Such That Income Is Taxed in the Hands