Jose Is Subject to the Top Marginal Federal Income Tax

question 3

Multiple Choice

Jose is subject to the top marginal Federal income tax rates. Carlita is considering establishing a trust in which Jose would be an income beneficiary. Considering only income tax consequences, Jose should be designated as:

• A) A first-tier beneficiary.
• B) A second-tier beneficiary.
• C) Only a remainder beneficiary.
• D) Both a first- and a second-tier beneficiary.

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Definitions:

In Rem Jurisdiction

A legal term referring to the court's power to adjudicate matters pertaining to property within its territory, regardless of the owner's location.

Geographic Area

A specific portion of the Earth's surface defined by natural or artificial boundaries.

Probate Court

A court having jurisdiction over proceedings concerning the settlement of a deceased person's estate.

Deceased Person

An individual who has died.