Sally Transfers Property to a Revocable Trust

question 98

Multiple Choice

Sally transfers property to a revocable trust. Under the terms of the trust agreement, Allison is to receive income for ten years at which time the remainder is to go to Tom. During the year, the trust earns $10,000 in corporate bond interest income and recognizes a capital gain of $20,000. The interest is distributed to Allison and the capital gain is properly allocated to principal. Allison (not Sally) will pay tax on

• A)$0.
• B)$10,000.
• C)$20,000.
• D)$30,000.

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Definitions:

Jungian Theory

A psychological framework by Carl Jung that introduces concepts like the collective unconscious, archetypes, and personality types.

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Freudian Therapist

A psychotherapist who follows the principles of Sigmund Freud, emphasizing the influence of the unconscious mind, childhood experiences, and defense mechanisms on behavior.