Which of the Following Statements Regarding the Taxation of a Trust

question 101

Multiple Choice

Which of the following statements regarding the taxation of a trust is incorrect?

• A)An irrevocable trust's income is taxed to the grantor.
• B)Trusts are generally not taxed at favorable rates for income shifting.
• C)Trusts are not subject to double taxation.
• D)A trust's long-term capital gains are taxed at a top rate of 15%.

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Definitions:

Optic Disks

The point of exit for ganglion cell axons leaving the eye, also known as the optic nerve head.

Blind Spots

Areas in which a person's view is obstructed, or in a broader sense, areas of knowledge or understanding that are lacking or not perceived.

Macular Degeneration

A progressive eye condition affecting the macula of the retina, leading to loss of central vision.

Cataracts

A clouding of the lens in the eye, leading to a decrease in vision.