Identify Which of the Following Statements Is True

question 34

Multiple Choice

Identify which of the following statements is true.

• A)Beneficiaries of simple trusts are taxed currently on their pro rata share of taxable distributable net income (DNI)regardless of the actual amount distributed to them during the period.
• B)The income received by the beneficiaries of the trust loses its character once it is distributed.
• C)Capital losses remaining in the final year of a trust do not pass through to the beneficiaries succeeding to the trust property.
• D)All of the above are false.

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Definitions:

Reality Principle

A psychoanalytic concept suggesting that ego makes decisions based on the reality of the world, taking into account societal norms and laws.

Gratification Delay

The ability to resist the temptation for an immediate reward and wait for a later reward.

Ego

In psychoanalytic theory, a part of the personality that mediates between external reality, the id, and superego, and is responsible for realistic and socially appropriate behavior.

Amoral

Lacking moral sense; unconcerned with the rightness or wrongness of something.