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:

Self-Sufficient

Refers to an individual, household, or community that has the capacity to fulfill all its needs without external assistance.

Resource Endowments

Resource endowments refer to the natural resources a country has available for use and trade, influencing its economic structure and development potential.

Net Importer

A country or region that imports more goods and services than it exports, resulting in a negative trade balance.

Economies Of Scale

The cost advantage that arises with increased output of a product, where the average cost per unit falls as the volume of its production increases.