In 2020, Paul Transfers $1,000,000 to a Trust Benefiting His

question 86

Multiple Choice

In 2020, Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?

• A)$0
• B)$400,000
• C)$1,000,000
• D)$1,200,000

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Definitions:

Deferred Contribution

Contributions or payments made to a fund or organization that are to be recognized as revenue over a future period.

Specific Project

A particular plan or undertaking designed to achieve a certain goal within a designated timeframe and often with a defined budget.

Reporting Method

Refers to the various methodologies and guidelines used for preparing and presenting financial statements.

Restricted Contribution

A donation given to a nonprofit organization with specific conditions attached as to how it can be spent.