Identify Which of the Following Statements Is False

question 28

Multiple Choice

Identify which of the following statements is false.

• A)The personal exemption for a trust provides a tax savings when some income is allocated to principal.
• B)Distributable net income (DNI)sets the ceiling on the amount of distributions taxed to the beneficiaries.
• C)A complex trust must distribute all its income annually.
• D)The beneficiaries of a simple trust are taxed on their share of DNI irrespective of the amount they receive.

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Definitions:

Real Value

The value of an asset, product, or service, adjusted for inflation, reflecting its purchasing power and true cost over time.

Dollar-Denominated Assets

Financial assets such as stocks, bonds, or real estate investments that are valued in U.S. dollars.

Real Value

Real value refers to the worth of a good or service taking into account inflation, providing a more accurate measure over time.

Nominal Income

The amount of money earned in current dollars, without adjustment for inflation or purchasing power.