In Which of the Following Independent Situations Has Trent Made

question 6

Multiple Choice

In which of the following independent situations has Trent made a gift?

• A) He established an irrevocable trust, income payable to himself for life and, upon his death, remainder to his children.
• B) He dies owning a U.S. savings bond with ownership listed as: "Trent, payable to Sue on Trent's death." Sue redeems the bond.
• C) He sends $25,000 to Alice's oral surgeon in payment of her dental implants. Alice is Trent's sister and does not qualify as his dependent.
• D) He pays Eva $800,000 in a property settlement of her marital rights. One month later, Trent and Eva are divorced.

---

Definitions:

Consolidated Net Income

The total earnings of a parent company and its subsidiaries, after taxes and interest, reported as a single figure.

Noncontrolling Interest

Noncontrolling interest is the portion of equity interest in a subsidiary not held by the parent company, reflecting the equity ownership of minority shareholders.

Dividends

Distributions of earnings from a corporation to its shareholders, typically in the form of profit sharing.

Noncontrolling Interest

A minority stake in a company that is not large enough to exercise control over the company, often reflected in the financial statements of a parent company that owns more than 50% but less than 100% of a subsidiary.