46. A complex trust is
a. any trust agreement containing an income tax savings provision.
b. any trust having more than six living beneficiaries.
c. any trust with only tier 1 beneficiaries.
d. any trust that does not qualify as a simple trust.
47. A complex trust receives taxable interest of $12,000, taxable dividends of $4,000, capital gains of $4,000 and pays a trustee fee of $1,000, all charged to income. The trustee makes a discretionary distribution to Tom of $8,000. How much of the distribution to Tom will be characterized as capital gain?
48. At the end of the section 645 election period the qualified revocable trust
a. will have transferred to it all of the assets of the decedent’ probate estate.
b. must start filing its income tax returns for calendar years.
c. may continue to file its income tax returns for fiscal tax years.
d. is deemed to become irrevocable.
49. When Subchapter J refers to “income” this reference is to
a. fiduciary accounting income (FAI).
b. gross taxable income.
c. net taxable income.
d. adjusted taxable income.
50. The terms of the governing instrument (will or trust agreement)
a. can trump state law on the subject of estate/trust income and principal definitions.
b. must always defer to state law.
c. must always defer to federal law.
d. cannot be successfully challenged 6 months after date of death (for a will) or creation (for a trust agreement).