Sally Transfers Property to a Revocable Trust

question 98

Multiple Choice

Sally transfers property to a revocable trust. Under the terms of the trust agreement, Allison is to receive income for ten years at which time the remainder is to go to Tom. During the year, the trust earns $10,000 in corporate bond interest income and recognizes a capital gain of $20,000. The interest is distributed to Allison and the capital gain is properly allocated to principal. Allison (not Sally) will pay tax on

• A)$0.
• B)$10,000.
• C)$20,000.
• D)$30,000.

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Definitions:

Behavioral Withdrawal

The act of retreating or disengaging from social interactions and activities, often as a coping mechanism for stress or anxiety.

Social Rejection

The act of being deliberately excluded or dismissed by individuals or groups in social or professional contexts.

External and Temporary

Characteristics or conditions outside of an individual that are not permanent or lasting in nature.

Overgeneralized

Referring to a conclusion or generalization that is too broad and not supported by the specific instances or evidence available.