Which of the Following Restrictions Applies Concerning Distributions to Trust

question 40

Multiple Choice

Which of the following restrictions applies concerning distributions to trust beneficiaries?

• A) Special allocations are not allowed under Subchapter J.
• B) Special allocations are allowed but only in the trust's termination year.
• C) Special allocations are allowed but only for portfolio income items.
• D) Special allocations of income types are allowed assuming that they carry a substantial economic effect.

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Definitions:

Attention-holding

The ability of an object, event, or activity to maintain an individual’s focus or interest over a period of time.

Physical Characteristics

The observable and measurable attributes of a body, such as height, skin color, and body shape.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment; involves questioning, analysis, synthesis, and reflection.

Cognitive Skills

Mental capabilities that involve processing information, understanding concepts, solving problems, and making decisions.