Trusts can be treated as separate tax entities

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Trusts can be treated as separate tax entities or as conduits through which income is passed to the beneficiaries. Income generally will be taxed in each of the following ways EXCEPT:

A. Income is taxable to the trust if it is accumulated by the trust.

B. Income is taxable to the beneficiaries to the extent the trust distributes or makes it available to them.

C. Income can be distributed in part to the beneficiaries with the balance accumulated, and the distributed portion is taxable to the beneficiaries and the accumulated portion is taxable to the trust.

D. Income is taxable to the trust or to the beneficiaries in accordance with the trustee’s direction.

Reference no: EM13930151

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