A trust that is required to distribute all of its income annually receives a personal exemption for the year of

Question

Quizplus · Accepted Answer

A trust that is required to distribute all of its income annually, also known as a simple trust, is entitled to a personal exemption of $300 for the tax year. This means that the trust's taxable income is reduced by $300 before calculating the tax owed. Option A is incorrect because the trust does have income to retain. Options B and D are also incorrect because the personal exemption for a simple trust is $300, not $100 or $600.

A Trust That Is Required to Distribute All of Its