Identify Which of the Following Statements Is True

question 34

Multiple Choice

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.