A Trust Established for the Benefit of A, Age 23

question 23

Multiple Choice

A trust established for the benefit of A, age 23, and B, age 13, generated $8,000 of dividend income.The trustee distributed $2,000 to A and $1,500 to B.The taxable income of the trust (before the exemption deduction) is

• A)$8,000
• B)$6,000
• C)$4,500
• D)$0

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Definitions:

Theoretical

Relating to or based on theory, these ideas and principles are used to develop models or explanations for phenomena, as opposed to practical applications or empirical evidence.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Chance

The occurrence of events without any predictable pattern or cause, often expressed in terms of probability.

Hit

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