American College Exam HS330 Topic 1 Question 91 Discussion

Actual exam question for American College's HS330 exam

Question #: 91
Topic #: 1

In which of the following situations will the grantor be taxed on income from trust property.

l. The grantor of a trust gives one of the trust beneficiaries the right to add or delete beneficiaries.

II .An adverse party to the grantor holds the power to determine the timing of trust distributions to the beneficiaries.

Al only

BII only

CBoth l and ll

DNeither I nor II

Show Suggested Answer

Suggested Answer: D

by Yvonne at Jul 02, 2024, 04:47 AM

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Torie

1 months ago

Trust questions are the bane of my existence, but I think the answer is B. Having an adverse party control the distributions seems like the clincher.

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Adela

5 days ago

Yeah, that makes sense. So it's only II that would result in the grantor being taxed.

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Carmen

13 days ago

I think it's B too. The grantor won't be taxed if an adverse party controls the distributions.

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Nu

1 months ago

Ah, the old trust tax conundrum. I'm going to have to go with B. An adverse party controlling the timing of distributions is the key factor here.

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Barbra

3 days ago

C) Both l and ll

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Sherell

17 days ago

B) II only

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Cristy

27 days ago

A) l only

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Lisha

2 months ago

Ha! This question is a real brain-teaser. I'm going to have to go with D. Neither I nor II seems to be the correct answer. The IRS loves these tricky trust questions.

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Georgene

19 days ago

Hmm, I see your point. That does make sense. I'll reconsider my answer.

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Carin

20 days ago

I think it's actually C, Both I and II. The grantor would be taxed in both situations.

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Winfred

27 days ago

I agree with you, D seems like the safest choice.

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Goldie

2 months ago

I'm not sure about this one. The question seems a bit tricky, but I'm going to go with C. Both I and II seem to be situations where the grantor would be taxed.

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Dell

6 days ago

I agree with you, I think it's C) Both l and ll

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Nenita

17 days ago

I'm not sure, but I think it might be D) Neither I nor II

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Jeannetta

20 days ago

I disagree, I believe it's C) Both l and ll

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Annette

1 months ago

I agree with you. I think it's A) l only as well. The grantor would be taxed in that situation.

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Flo

1 months ago

I think it's A) l only

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Ty

2 months ago

I think it's A) l only. The grantor would be taxed in the situation where the trust beneficiary has the power to add or delete beneficiaries.

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Isabella

2 months ago

Hmm, I think the answer is B. If an adverse party has the power to determine the timing of trust distributions, then the grantor would be taxed on the income from the trust property.

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