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

24 days 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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Nu

25 days 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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Cristy

7 days ago

A) l only

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Lisha

1 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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Winfred

7 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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Annette

20 days 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

20 days ago

I think it's A) l only

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Ty

1 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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