Which, If Any, of the Following Statements Relates to the Tax

question 41

Multiple Choice

Which, if any, of the following statements relates to the tax treatment of both estates and trusts?

• A)The entity is required to distribute all of its income currently to its beneficiaries.
• B)The entity must use the same tax year as its creator (i.e., grantor, decedent).
• C)In the year of its termination, the entity's net operating loss carryovers are passed through to its beneficiaries.
• D)The termination date of the entity is specified in the controlling document.

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Definitions:

Priority

The status of being given more importance or attention before other things.

Default

Failure to fulfill an obligation, especially failure to meet a financial obligation or to appear in court when required.

Secured Party

An individual or entity that holds an interest, typically a security interest, in another's property as collateral for a debt.

Relinquish

To voluntarily give up or surrender a claim, right, or possession.