The Raven Trust Was Terminated This Year and David, the Beneficiary

question 61

Multiple Choice

The Raven Trust was terminated this year and David, the beneficiary of the corpus, received all of the trust assets.The trust had a $10,000 net operating loss; this was the only tax year in which the trust operated a business.The entity has one income beneficiary, Flo.As a result of these transactions:

• A)Flo claims the $10,000 NOL on her Form 1040.
• B)David claims the $10,000 NOL on his Form 1040.
• C)Flo and David each report a $5,000 NOL on their Forms 1040.
• D)The $10,000 NOL is lost forever.

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Definitions:

Relative

A person connected to another by blood or marriage, or an entity regarded in relation to its connections with others within a system.

Orphaned Children

Children who have lost both parents through death or, in some definitions, have been abandoned by their parents.

Parental Attention

The degree of care, awareness, and responsiveness a parent shows towards their child's needs and activities.

Infantile Amnesia

The inability of adults to recall autobiographical memories from early childhood, typically before the age of 3 or 4 years.