Which of the Following Statements Does Not Apply to a Revocable

question 46

Multiple Choice

Which of the following statements does not apply to a revocable trust?

• A)The grantor of the trust is taxed on trust income.
• B)The trust property is included in the grantor's gross estate.
• C)Revocable trusts are all simple trusts.
• D)The grantor makes a gift when the trust distributes trust income to a beneficiary.

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Definitions:

Arthur Laffer

An economist known for the Laffer Curve, which theorizes there exists an optimal tax rate that maximizes government revenue without discouraging economic activity.

Macroeconomic Theory

A branch of economics that studies the behavior and performance of an economy as a whole, including issues like inflation, unemployment, and national income.

Supply-Sider

An advocate or supporter of supply-side economics, a school of economic thought that emphasizes the benefits of making goods and services more available to consumers.

Expansionary Monetary Policy

To fight recessions, the Federal Reserve increases the money supply.