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Choose two answers
A. LDP
B. RSVP-TE
C. ADP
D. TDP
E. MPLS-TE
Answer: A,B
NEW QUESTION: 2
After having been divorced for several years, Mrs. Blended has remarried a man with three children of his
own. She has set up a revocable trust in which she deposited funds that she inherited when her mother
died, so that the monies will go uncontested to her two biological children in the event of her own death.
These two adult children are the only beneficiaries of the trust. Mrs. Blended has no plans to touch any of
the money in the trust unless circumstances demand it in the future. The trust is invested in a mutual fund
that paid $500 in dividend income and distributed $3,000 in long-term capital gain income to the trust this
year. Which of the following statements is true regarding the tax treatment of these distributions?
A. Assuming her two adult children are equal beneficiaries, each one is responsible for paying tax on 50%
of the income to the trust, or $1,750.
B. Mrs. Blended must pay taxes on the $3,500 in distributions.
C. The distributions will not be taxed at this point; they will be taxed as part of the estate upon Mrs.
Blended's death.
D. The distributions will not be taxed at this point; they will be taxed only when Mrs. Blended or her
beneficiaries make withdrawals from the trust.
Answer: B
Explanation:
If Mrs. Blended established a revocable trust that invested in a mutual fund that distributed
$ 3,500 total in dividend and capital gain income this year, Mrs. Blended is responsible for paying taxes on
the distributions. Whether or not any monies or assets are withdrawn from a revocable trust, the grantor of
the trust-in this case, Mrs. Blended-- is responsible for any taxes due.
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