Sally transfers property to a revocable trust. Under the terms of the trust agreement, Allison is to receive income for ten years at which time the remainder is to go to Tom. During the year, the trust earns $10,000 in corporate bond interest income and recognizes a capital gain of $20,000. The interest is distributed to Allison and the capital gain is properly allocated to principal. Allison
(not Sally) will pay tax on
A) $0.
B) $10,000.
C) $20,000.
D) $30,000.
A) $0.
The revocable trust is a grantor trust.
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A) elastic B) inelastic C) flexible D) supply-driven E) cross-elastic
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a. age b. economic level c. educational background d. culture
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Answer the following statement true (T) or false (F)