The Drabb Trust Owns a Plot of Business-Related Land,basis of $50,000,fair

question 126

Multiple Choice

The Drabb Trust owns a plot of business-related land,basis of $50,000,fair market value of $35,000.Drabb is subject to a 35% marginal income tax rate.Its sole beneficiary,Eddie,is subject to a 15% marginal income tax rate.Drabb's current-year distributable net income is $95,000.What is the most preferable action for the trustee of Drabb to take,considering only the related tax consequences?

• A)Distribute the land to Eddie and make a § 643(e) election.
• B)Distribute the land to Eddie and make no § 643(e) election.
• C)Sell the land to a third party.
• D)Neither sell nor distribute the land.

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