Identify which of the following statements is true.
A)Beneficiaries of simple trusts are taxed currently on their pro rata share of taxable distributable net income (DNI)regardless of the actual amount distributed to them during the period.
B)The income received by the beneficiaries of the trust loses its character once it is distributed.
C)Capital losses remaining in the final year of a trust do not pass through to the beneficiaries succeeding to the trust property.
D)All of the above are false.

Question

Quizplus · Accepted Answer

Beneficiaries of simple trusts are taxed currently on their pro rata share of taxable distributable net income (DNI) regardless of the actual amount distributed to them during the period. Option B is false since the income received by beneficiaries retains its character, and option C is also false since capital losses may pass through to beneficiaries succeeding to trust property.

Identify Which of the Following Statements Is True