Which of the Following Statements Is TRUE Regarding Trusts

question 7

Multiple Choice

Which of the following statements is TRUE regarding trusts?

• A) The residence of a trust is determined by the residence of the trustees.
• B) Losses that exceed income in a trust are allocated to the beneficiary for tax purposes.
• C) Mutual funds are one example of commercial trusts.
• D) Income that is payable to a beneficiary cannot be subtracted from the trust's income.

---

Definitions:

Sued

The act of bringing a legal action against an individual or entity, seeking a legal remedy for damages or enforcement of rights.

Exculpatory Clause

A contract clause that frees one party from liability in the event of a wrongdoing or negligence.

Faulty and Rotten Floorboards

A condition in which the wooden boards that make up the floor are damaged or decayed, potentially causing safety hazards.

Modern Legal Trends

Current developments and changes in law that reflect evolving societal values, technological advancements, and shifts in judicial thinking.