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:

African-Canadian Father

A male parent or guardian of African descent living in Canada, emphasizing the cultural and demographic context.

Asian-Canadian Mother

Refers to a female parent or guardian of Asian descent living in Canada, highlighting considerations of cultural background in various contexts.

Biculture

The presence or co-existence of two distinct cultures in a single individual or community, leading to individuals blending or navigating both cultural norms and identities.

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