Which of the Following Is the Most Accurate Statement Concerning

question 28

Multiple Choice

Which of the following is the most accurate statement concerning the use of trusts in tax planning?

• A) Nontax reasons for the use of trusts (such as avoidance of probate) typically outweigh tax reasons for creating trusts today.
• B) The grantor trust rules allow grantors to shift income into trusts and reduce their own taxes.
• C) The large 15% tax bracket available to trusts allows complex trusts to be used as an income- shifting device.
• D) None of the above statements are correct.

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Definitions:

Obligation

A duty or commitment that an individual is bound to, either legally or morally.

Childrearing Practices

The methods and strategies used by parents and caregivers to raise and nurture children.

Developmental Psychologists

Professionals who study the psychological growth and changes that occur throughout the lifespan, from infancy to old age.

Physical Punishment

The use of physical force with the intention of causing a child to experience pain, but not injury, for the purpose of correction or control.