Which of the Following Statements Is False with Regard to Spousal

question 6

Multiple Choice

Which of the following statements is false with regard to spousal trusts?

• A)Property is deemed to have been sold at its cost amount when transferred to the trust.
• B)The trust property is deemed to be sold at market value upon the death of the beneficiary (the spouse).
• C)Both the spouse and any adult children may receive the capital of the trust prior to the spouse's death.
• D)The 21-year rule is waived for the trust's first 21-year anniversary.

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Definitions:

Payee

The party in a financial transaction to whom money is paid or is to be paid.

Interest Income

Earnings received from deposit accounts or investments that yield interest, such as savings accounts, bonds, or loans.

Accounts Receivable

An asset account that records amounts a company has a right to receive because it has provided goods or services on credit.

Nontrade Receivables

Amounts owed to a company that are not related to the sale of goods or services, such as tax refunds or loans to employees.