The Jiang Trust Manages Investment Assets That Were Contributed by Kong

question 74

Multiple Choice

The Jiang Trust manages investment assets that were contributed by Kong several years ago. The trust distributed one-half of its DNI this year to Kong. Kong can retain all of the trust's tax-exempt interest income if:

• A) One-half of the exempt income belongs to the trust. No special allocations are allowed by Subchapter J.
• B) Jiang is in a higher income tax bracket than Kong.
• C) Kong is in a higher income tax bracket than the trust.
• D) The tax-exempt bonds were contributed by Kong when the trust was created.

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Definitions:

Polycentric

Reflecting a principle or policy that involves or considers multiple centers of power or influence, often used in the context of international business strategies.

Geocentric

Geocentric pertains to considering the earth as the center, in historical contexts relating to the model of the universe or in modern times, applying a global and inclusive perspective in business strategies.

Expatriates

Individuals living outside their native country, often for professional reasons, to work in foreign offices or plants of their company.

Foreign Assignments

Work roles or projects assigned to employees which require them to live and work in a country different from their own.