The Drabb Trust Owns a Plot of Business-Related Land, Basis

question 59

Multiple Choice

The Drabb Trust owns a plot of business-related land, basis of $50,000, fair market value of $35,000. Drabb is subject to a 35% marginal income tax rate. Its sole beneficiary, Eddie, is subject to a 12% marginal income tax rate. Drabb's current-year distributable net income is $95,000. What is the most preferable action for Drabb's trustee to take considering only the related tax consequences?

• A) Distribute the land to Eddie and make a § 643(e) election.
• B) Distribute the land to Eddie and make no § 643(e) election.
• C) Sell the land to a third party.
• D) Neither sell nor distribute the land.

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Attitudes

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Leadership Styles

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Gender

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