Identify Which of the Following Statements Is False

question 45

Multiple Choice

Identify which of the following statements is false.

• A) The personal exemption for a trust provides a tax savings when some income is allocated to principal.
• B) A complex trust must distribute all its income annually.
• C) Distributable net income (DNI) sets the ceiling on the amount of distributions taxed to the beneficiaries.
• D) The beneficiaries of a simple trust are taxed on their share of DNI irrespective of the amount they receive.

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Definitions:

Financially Unsound Contract

A contract deemed as high-risk due to the financial instability or inability of one or more parties to fulfill their obligations.

Relieved from Performance

A legal condition where a party is released from fulfilling their obligations under a contract due to unforeseen circumstances.

Perfect Tender Rule

The perfect tender rule is a principle in sales law that allows a buyer to reject goods delivered by a seller if they do not meet all contract specifications.

Substantial Deviations

Major divergences or departures from a set path, standard, or expected norm.