Income-producing property to the trust

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Reference no: EM131347607

Andre established an irrevocable trust to benefit his daughter Lilly for life, and his two grandsons at Lilly’s death. He transferred $2 million of income-producing property to the trust and allocated $2 million of his GST exemption to the trust. Which statement is correct?

a. Distributions made to his grandsons at Lilly’s death are taxed at a flat 40% tax rate.

b. The grandsons are responsible for paying the GST tax in a taxable termination.

c. This trust is an example of an indirect skip trust.

d. The trust has an inclusion ratio of one.

Reference no: EM131347607

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