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Ginger created an ILIT and transferred a life insurance policy and rental property to the trust. She named her husband Alfred and her children the beneficiaries of the trust. The income from the property is sufficient to pay policy premiums every year. How is the trust income taxed?
Select one:
a. Trust income is taxed to Ginger because grantor trust rules apply.
b. Trust income is not taxed to Ginger because the trust is irrevocable and Ginger will not receive any income from the trust.
c. Trust income is taxed to the trust beneficiaries.
d. Trust income is taxed to the trust as distributable net income.
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