A Trust Is Required to Distribute 10% of Its Income

question 103

Multiple Choice

A trust is required to distribute 10% of its income to Eleanor. In addition, the trustee in his discretion may distribute income to Eleanor and/or Marshall. The trust has net accounting income of $50,000, none of which is tax-exempt. The trust distributes the $5,000 mandatory payment to Eleanor and also distributes discretionary amounts of $5,000 to Eleanor and $5,000 to Marshall. How much must Eleanor include in income?

• A)$5,000
• B)$10,000
• C)$50,000
• D)none of the above

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Definitions:

Wilcoxon Test Statistic

A non-parametric statistical measure used to compare two paired groups to assess whether their population mean ranks differ.

Level Of Significance

The probability of rejecting the null hypothesis when it is actually true, typically represented by alpha (α).

Null Hypothesis

A statement used in statistical testing which suggests that there is no significant difference or effect.

Nonparametric Method

Statistical methods that do not assume a specific distribution for the data, making them applicable to a wider range of data types.