Karly created a $300,000 trust that provided her mother with a lifetime income interest starting on January 1, with the remainder to go to her son. Karly expressly retained the power to revoke both the income and remainder interests at any time. Who will be taxed on the trust's income?

Question

Quizplus · Accepted Answer

Because Karly retained the power to revoke both the income and remainder interests at any time, she is the owner of the trust for income tax purposes. Therefore, Karly will be taxed on the trust's income.

Karly Created a $300,000 Trust That Provided Her Mother with a Lifetime