A Complex Trust (Not Required to Distribute Any Income) Generated

question 25

Multiple Choice

A complex trust (not required to distribute any income) generated a long- term capital loss of $100,000 in 2012. It had taxable income of $100,000 from domestic dividends in 2012. What is the tax treatment of the capital loss to the trust?

• A) Deduction of $3,000 and carryover of $97,000
• B) Deduction of $100,000
• C) Deduction of $6,000 and carryover of $94,000
• D) Deduction of $3,000 and no carryover

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Definitions:

Neurologically Develop

The process by which the nervous system, including the brain, develops and matures, influenced by both genetic and environmental factors.

Infant Rats

Very young rodents of the species Rattus, often used in scientific research to understand development and behavior.

Premature Human Babies

Infants born before completing the typical 37 weeks of gestation, often requiring special medical care due to underdeveloped organs.

Premature Babies

Infants born before completing the standard gestation period, often requiring specialized medical care.