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:

Sectional Party

A political party that represents the interests of a particular geographical region within a country.

Kansas-Nebraska Act

Legislation passed in 1854 that created the territories of Kansas and Nebraska, opening new lands for settlement and allowing the settlers to decide whether to allow slavery, leading to a violent period known as "Bleeding Kansas."

Republican Party

One of the two major contemporary political parties in the United States, traditionally advocating for conservatism, free market policies, and limited government intervention.

Slavery Expansion

The 19th-century movement and political conflict in the United States over whether new territories should permit slavery, leading up to the Civil War.