Which of the Following Is the Most Accurate Statement Concerning

question 81

Multiple Choice

Which of the following is the most accurate statement concerning the use of trusts in tax planning?

• A)The grantor trust rules allow grantors to shift income into trusts and reduce their own taxes.
• B)Nontax reasons for the use of trusts (such as avoidance of probate)typically outweigh tax reasons for creating trusts today.
• C)The large 15% tax bracket available to trusts allows complex trusts to be used as an income-shifting device.
• D)None of the above statements are correct.

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Definitions:

Inflation

The upward trend in the average pricing of goods and services, narrowing the scope of purchasing capacity.

Economic Well-Being

A measure of how well individuals and societies are doing in terms of income, wealth, and material goods.

Military Expenditures

Funds allocated by a nation for the maintenance and operation of its armed forces, including the development, procurement, and support of military hardware and personnel.

National Income

The total amount of money earned within a country, including wages, profits, rentals, and pension income.