Reference no: EM132932427

Problem 1: For GST purposes, which of the following is (are) true with respect to a taxable distribution?

I. The transferor always pays the GSTT.
II. A distribution of income from one trust to a 2nd trust is considered a transfer to a skip person if all interests in the 2nd trust are held by a skip person.
III. It is not a tax-inclusive transfer.

A) I

B) I and III

C) II

D) II and III

Problem 2: What are the characteristics of a complex trust?

A) The trustee is required to distribute the principal

B) The trust or the trust beneficiary is responsible for the payment of the income tax

C) The trustee may not accumulate income

D) The trustee receives income tax credits for administering the trust

Problem 3: In general, a grantor trust:

A) Protects the trust from any and all income tax liability

B) Subjects the trust beneficiaries to income tax liability

C) Protects the grantor by not taxing him/her on the income of the trust

D) Subjects the grantor of the trust to income tax liability, as the owner of the trust