George Transfers Property to an Irrevocable Trust for the Benefit

question 12

Multiple Choice

George transfers property to an irrevocable trust for the benefit of his adult children and names himself as trustee. The trust document requires the trustee to distribute trust property to the beneficiaries at the trustee's discretion with the possibility of no distribution to certain beneficiaries as the trustee deems appropriate. The trust will terminate at the end of nine years, and the property will pass to George's children. Which of the following statements is correct?

• A)The beneficiaries receive a present interest in the trust property when George transfers the assets to the trust.
• B)The transfer by George is eligible for the annual gift tax exclusion.
• C)George's transfer of property to the trust is not taxed under gift tax rules at the date of transfer.
• D)George's transfer of property to the trust is a gift of a future interest.

---

Definitions:

Hexane

A hydrocarbon with the formula C6H14, commonly used as a non-polar solvent in the extraction of oils and fats.

Breast Cancer

A type of cancer originating from breast tissue, characterized by the uncontrolled growth of breast cells.

Coping Responsibilities

The tasks or duties associated with managing stressors or challenging situations effectively.

Pattern Of Response

The regular or predictable way in which an entity reacts to a specific situation or stimulus.