Taxation of Business Entities
Mock Exam
Course Introduction
This course provides a comprehensive overview of the federal income taxation of business entities, including corporations, partnerships, limited liability companies, and S corporations. Students will examine the tax implications of forming, operating, and dissolving these entities, as well as the allocation of income, deductions, credits, and distributions among owners. The course covers key topics such as double taxation, entity selection considerations, contributions and distributions of property, liquidations, and special provisions affecting closely held businesses. Through practical examples and case studies, students will develop a solid understanding of tax planning strategies and compliance requirements relevant to a variety of business entities.
Recommended Textbook
South Western Federal Taxation 2018 Comprehensive 41st Edition by William H. Hoffman
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Chapter 1: An Introduction to Taxation and Understanding
the Federal Tax Law
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Q1) Melinda has been referred to you by one of your clients.In the past,she has prepared her own income tax returns,but she has become overwhelmed by the increased complexity of the tax law.Consequently,Melinda wants you to prepare her return for calendar year 2017.In reviewing her 2016 return,you note that she has claimed as a deduction the entire cost of a business building that should have been capitalized and depreciated.What course of action should you follow?
Answer: You should recommend to Melinda that an amended return be filed for 2016 correcting the error.If she refuses,you should assess the gravity of the error and how it impacts on your ability to file an accurate return for 2017.If you cannot do so,then you must decline the engagement.
Q2) The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.
A)True
B)False
Answer: True
Q3) A deduction for contributions by an employee to certain retirement plans. Answer: d
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Page 3
Chapter 2: Working With the Tax Law
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Q1) The IRS is not required to make a letter ruling public.
A)True
B)False
Answer: False
Q2) Which court decision would probably carry more weight?
A)Regular U.S. Tax Court decision
B)Reviewed U.S. Tax Court decision
C)U.S. District Court decision
D)Tax Court Memorandum decision
E)U.S. Court of Federal Claims Answer: B
Q3) The primary purpose of effective tax planning is to reduce or defer the tax in the current tax year.
A)True
B)False
Answer: False
Q4) Tax planning usually involves a completed transaction.
A)True
B)False
Answer: False
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Chapter 3: Computing the Tax
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Q1) Surviving spouse filing status begins in the year in which the deceased spouse died.
A)True
B)False
Answer: False
Q2) Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%) and her uncle (60%).Disregarding tie-breaker rules,Ellen is a qualifying child as to:
A)Only her father.
B)Only her grandfather and uncle.
C)Only her uncle.
D)All parties involved (i.e., father, grandfather, and uncle).
E)None of these.
Answer: D
Q3) $1,050
Answer: c
Q4) A stepdaughter who does not live with taxpayer.
Answer: b
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Chapter 4: Gross Income: Concepts and Inclusions
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Q1) After the divorce,Jeff was required to pay $18,000 per year to his former spouse,Darlene,who had custody of their child.Jeff's payments will be reduced to $12,000 per year in the event the child dies or reaches age 21.During the year,Jeff paid the $18,000 required under the divorce agreement.Darlene must include the $12,000 in gross income.
A)True
B)False
Q2) Father made an interest-free loan of $25,000 to Son who used the money to buy an SUV.Son had $1,600 interest income from a certificate of deposit for the year.Father is not required to impute interest income.
A)True
B)False
Q3) The fact that the accounting method the taxpayer uses to measure income is consistent with GAAP does not assure that the method will be acceptable for tax purposes.
A)True
B)False
Q4) How does the taxation of Social Security benefits differ from the taxation of an annuity purchased by the taxpayer?
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Chapter 5: Gross Income: Exclusions
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Q1) Zack was the beneficiary of a life insurance policy on his wife.Zack had paid $20,000 in premiums on the policy.He collected $50,000 on the policy when his wife died from a terminal illness.Because it took several months to process the claim,the insurance company paid Zack $53,000,the face amount of the policy plus $3,000 interest.Zack must include $23,000 in his gross income.
A)True
B)False
Q2) Cash received by an employee from an employer:
A)Is not included in gross income if it was not earned.
B)Is not taxable unless the payor is legally obligated to make the payment.
C)Must always be included in gross income.
D)May be included in gross income although the payor is not legally obligated to make the payment.
E)None of these.
Q3) If an employer pays for the employee's long-term care insurance premiums,the employee can exclude from gross income the premiums but all of the benefits collected must be included in gross income.
A)True
B)False
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Page 7
Chapter 6: Deductions and Losses: in General
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Q1) If an activity involves horses,a profit in at least two of seven consecutive years meets the presumptive rule of § 183.
A)True
B)False
Q2) The amount of the addition to the reserve for bad debts for an accrual method taxpayer is allowed as a deduction for tax purposes,but is not allowed for a cash method taxpayer.
A)True
B)False
Q3) In determining whether an activity should be classified as a business or as a hobby,the satisfaction of the presumption (i.e.,profit in at least 3 out of 5 years) ensures treatment as a business.
A)True
B)False
Q4) Expenses incurred for the production or collection of income generally are deductions from adjusted gross income.
A)True
B)False
Q5) What losses are deductible by an individual taxpayer?
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Chapter 7: Deductions and Losses: Certain Business
Expenses and Losses
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Sample Questions
Q1) The domestic production activities deduction (DPAD) for a sole proprietor is calculated by multiplying a percentage rate (currently 9%) times adjusted gross income.
A)True
B)False
Q2) An individual may deduct a loss on rental property even if it does not meet the definition of a casualty loss.
A)True
B)False
Q3) On July 20,2016,Matt (who files a joint return) purchased 3,000 shares of Orange Corporation stock (the stock is § 1244 small business stock) for $24,000.On November 10,2016,Matt purchased an additional 1,000 shares of Orange Corporation stock from a friend for $150,000.On September 15,2017,Matt sold the 4,000 shares of stock for $120,000.How should Matt treat the sale of the stock on his 2017 return?
A)$54,000 ordinary loss.
B)$100,000 ordinary loss; $46,000 net capital gain.
C)$100,000 ordinary loss; $20,000 STCL.
D)$130,000 ordinary loss; $66,000 LTCG.
E)None of the above.
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Chapter 8: Depreciation, cost Recovery, amortization, and Depletion
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Sample Questions
Q1) On June 1,2017,James places in service a new automobile that cost $40,000.The car is used 60% for business and 40% for personal use.(Assume this percentage is maintained for the life of the car.) James does not take additional first-year depreciation.Determine the cost recovery deduction for 2017.
A)$1,776
B)$1,896
C)$4,800
D)$8,000
E)None of the above
Q2) Taxpayers may elect to use the straight-line method under MACRS for personalty.
A)True
B)False
Q3) Land improvements are generally not eligible for cost recovery.
A)True
B)False
Q4) The luxury auto cost recovery limits applies to all automobiles.
A)True
B)False
Page 10
Q5) Discuss the beneficial tax consequences of an SUV not being classified as a passenger automobile.
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Chapter 9: Deductions: Employee and
Self-Employed-Related Expenses
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Sample Questions
Q1) Discuss the 2%-of-AGI floor and the 50% cutback limitation in connection with various employee expenses under the following arrangements:
a.The employee is not reimbursed by the employer.
b.The employee is fully reimbursed under a nonaccountable plan.
c.The employee is partially reimbursed under an accountable plan.
d.The employee is fully reimbursed under an accountable plan.
Q2) A taxpayer just changed jobs and incurred unreimbursed moving expenses.
a.What are his (or her) options if an income tax return has to be filed before the time test is met?
b.What happens if the moving expense deduction has been claimed and the time test is not later satisfied?
Q3) Amy lives and works in St.Louis.In the morning she flies to Boston,has a three-hour business meeting,and returns to St.Louis that evening.For tax purposes,Amy was away from home.
A)True
B)False
Q4) When is a taxpayer's work assignment in a new locale temporary? Permanent? What difference does it make?
Q5) Mixed use (both business and pleasure) domestic travel.
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Chapter 10: Deductions and Losses: Certain Itemized
Deductions
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Sample Questions
Q1) Al contributed a painting to the Metropolitan Art Museum of St.Louis,Missouri.The painting,purchased six years ago,was worth $40,000 when donated,and Al's basis was $25,000.If this painting is immediately sold by the museum and the proceeds are placed in the general fund,Al's charitable contribution deduction is $25,000 (subject to percentage limitations).
A)True
B)False
Q2) Joseph and Sandra,married taxpayers,took out a mortgage on their home for $350,000 15 years ago.In May of this year,when the home had a fair market value of $450,000 and they owed $250,000 on the mortgage,they took out a home equity loan for $220,000.They used the funds to purchase a single engine airplane to be used for recreational travel purposes.What is the maximum amount of debt on which they can deduct home equity interest?
A)$50,000
B)$100,000
C)$220,000
D)$230,000
E)None of the above
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Chapter 11: Investor Losses
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Sample Questions
Q1) Kate dies owning a passive activity with an adjusted basis of $100,000.Its fair market value at that date is $130,000.Suspended losses relating to the property were $45,000.
A)The heir's adjusted basis is $130,000, and Kate's final deduction is $15,000.
B)The heir's adjusted basis is $130,000, and Kate's final deduction is $45,000.
C)The heir's adjusted basis is $100,000, and Kate's final deduction is $45,000.
D)The heir's adjusted basis is $175,000, and Kate has no final deduction.
E)None of the above.
Q2) Mary Jane participates for 100 hours during the year in an activity she owns.She has no employees and is the only participant in the activity.The activity is a significant participation activity.
A)True
B)False
Q3) Bruce owns a small apartment building that produces a $25,000 loss during the year.His AGI before considering the rental loss is $85,000.Bruce must be a material participant with respect to the rental activity in order to deduct the $25,000 loss under the real estate rental exception.
A)True
B)False
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Chapter 12: Tax Credits and Payments
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Q1) Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.
A)True
B)False
Q2) Rick spends $750,000 to build a qualified low-income housing project,which is placed in service on January 1,2017.He financed the project using his personal funds.What is the amount of the low-income housing credit that Rick may claim in 2017 (assuming a rate of 7.40%)? What is the total amount of the credit that Rick may claim as a result of the $750,000 expenditure?
Q3) Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.
A)True
B)False
Q4) Unused foreign tax credits can be carried back three years and forward fifteen years.
A)True
B)False
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Page 14
Chapter 13: Property Transactions: Determination of Gain or
Loss, basis Considerations, and Nontaxable Exchanges
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Sample Questions
Q1) Jason owns Blue Corporation bonds (face value of $10,000),purchased on January 1,2017,for $11,000.The bonds have an annual interest rate of 6% and a maturity date of December 31,2026.If Jason elects to amortize the bond premium,what is his taxable interest income for 2017 and the adjusted basis for the bonds at the end of 2017 (assuming straight-line amortization is appropriate)?
A)$600 and $11,000
B)$600 and $10,900
C)$500 and $11,000
D)$500 and $10,900
E)None of the above
Q2) Jacob owns land with an adjusted basis of $140,000 and a fair market value of $115,000.Determine the amount of realized and recognized gain or loss to the seller and the adjusted basis for the buyer for each of the following.
a.Jacob sells the land for $115,000 to a corporation in which he owns 60% of the stock. b.Jacob sells the land for $115,000 to a partnership in which he has a capital and profits interest of 60%.
Q3) Define an involuntary conversion.
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Page 15
Chapter 14: Property Transactions, capital Gains and
Losses, sec1231, and Recapture Provisions
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Q1) Lynne owns depreciable residential rental real estate which has accumulated depreciation (all from straight-line) of $65,000.If Lynne sold the property,she would have a $53,000 gain.The initial characterization of the gain would be:
A)Section 1245 gain.
B)Section 1231 gain.
C)Section 1250 gain.
D)Section 1239 gain.
E)None of the above.
Q2) Sara is filing as head of household and has 2017 taxable income of $57,000 which includes $3,000 of net long-tem capital gain.The net long-term capital gain is made up of $1,000 25% gain and $2,000 0%/15%/20% gain.What is the tax on her taxable income using the alternative tax method? Note: Use the tax rate schedule rather than the tax table.
A)$0
B)$8,503.
C)$8,203.
D)$8,303.
E)None of the above
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Chapter 15: Alternative Minimum Tax
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Q1) The deduction for charitable contributions in calculating the regular income tax can differ from that in calculating the AMT,because the percentage limitations (20%,30%,and 50%) may be applied to a different base amount.
A)True
B)False
Q2) Factors that can cause the adjusted basis for AMT purposes to be different from the adjusted basis for regular income tax purposes include:
A)A different amount of depreciation has been deducted for AMT purposes and regular income tax purposes.
B)The spread on the exercise of an incentive stock option (ISO) is recognized for AMT purposes,but is not recognized for regular income tax purposes.
C)A different amount has been deducted for circulation expenditures for AMT purposes and for regular income tax purposes.
D)Only a.and b.
E)a.,b.,and c.
Q3) Why is there no AMT adjustment for charitable contributions?
Q4) Why is there a need for a second tax system called the alternative minimum tax?
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Chapter 16: Accounting Periods and Methods
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Q1) In 2017,Beth sold equipment used in her business.Her basis in the property was $300,000 ($500,000 cost less $200,000 of depreciation).Beth sold the property for $400,000,with $100,000 due on the date of the sale and $300,000 (plus interest at the Federal rate) due in 2018.Beth's recognized gain from the installment sale in 2017 is:
A)$0.
B)$50,000.
C)$100,000.
D)$200,000.
E)None of the above.
Q2) A calendar year,cash basis corporation began business on April 1,2017,and paid $2,400 for a 24-month liability insurance policy.An accrual basis,calendar year taxpayer also began business on April 1,2017,and purchased a 24-month liability insurance policy.The accrual basis taxpayer must amortize the premiums over 24 months but the cash basis taxpayer may deduct the total premiums in 2017.
A)True
B)False
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18
Chapter 17: Corporations: Introduction and Operating Rules
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Q1) Schedule M-1 is used to reconcile net income as computed for financial accounting purposes with taxable income reported on the corporation's income tax return.
A)True
B)False
Q2) On December 20,2017,the directors of Quail Corporation (an accrual basis,calendar year taxpayer) authorized a cash donation of $5,000 to the American Cancer Society,a qualified charity.The payment,which is made on April 11,2018,may be claimed as a deduction for tax year 2017.
A)True
B)False
Q3) Adrian is the president and sole shareholder of Pigeon Corporation.He also lends money and rents a building to the corporation.Discuss how these business relationships between Adrian and Pigeon Corporation can help avoid double taxation.What limitations are there on the use of such relationships?
Q4) The corporate marginal income tax rates range from 15% to 39%,while the individual marginal income tax rates range from 10% to 39.6%.
A)True
B)False
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Page 19
Chapter 18: Corporations: Organization and Capital Structure
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Q1) In order to retain the services of Eve,a key employee in Ted's sole proprietorship,Ted contracts with Eve to make her a 30% owner.Ted incorporates the business receiving in return 100% of the stock.Three days later,Ted transfers 30% of the stock to Eve.Under these circumstances,§ 351 will not apply to the incorporation of Ted's business.
A)True
B)False
Q2) In a § 351 transaction,if a transferor receives consideration other than stock,the transaction can be taxable.
A)True
B)False
Q3) The receipt of nonqualified preferred stock in exchange for the transfer of appreciated property to a controlled corporation results in recognition of gain to the transferor.
A)True
B)False
Q4) How is the transfer of liabilities in a property transaction generally treated for tax purposes? How is a transfer of liabilities generally treated in a § 351 transaction? What exceptions could arise to this usual treatment in a § 351 setting?
Page 20
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Chapter 19: Corporations: Distributions Not in Complete
Liquidation
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Q1) Maria owns 75% and Christopher owns 25% of Cockatoo Corporation,a calendar year taxpayer.Cockatoo makes a $600,000 distribution to Maria on April 1 and a $200,000 distribution to Christopher on May 1.Cockatoo's current E & P is $120,000 and its accumulated E & P is $500,000.What are the tax implications of the distributions to Maria and Christopher?
Q2) Certain dividends from foreign corporations can be qualified dividends for purposes of the preferential rate available to individuals.
A)True
B)False
Q3) A corporation that distributes a property dividend must reduce its E & P by the adjusted basis of the property less any liability on the property. A)True
B)False
Q4) Use of MACRS cost recovery when computing taxable income does not require an E & P adjustment.
A)True
B)False
Q5) Explain the stock attribution rules that apply in the case of stock redemptions.
Page 21
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Chapter 20: Corporations: Distributions in Complete
Liquidation and an Overview of Reorganization
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Q1) Compare the sale of a corporation's assets with a sale of its stock from the perspective of the seller.
Q2) Cotinga Corporation is acquiring Petrel Corporation through a "Type C" reorganization by exchanging 20% of its voting stock and $50,000 for all of Petrel's assets (value of $800,000 and basis of $600,000) and liabilities ($100,000).Jerrika owns 48% of Petrel (basis $270,000),and Allen owns the remaining 52% (basis $380,000).They exchange their stock in Petrel for their proportionate shares of the Cotinga stock and cash.What is the value of the Cotinga stock received by Jerrika and Allen? What are the amounts of gains/losses each recognizes due to the reorganization? What is Jerrika's and Allen's basis in the Cotinga stock?
Q3) Pursuant to a complete liquidation,Oriole Corporation distributes to its shareholders land with a basis of $350,000 and a fair market value of $800,000.The land is subject to a liability of $920,000.What is Oriole's recognized gain or loss on the distribution?
A)$0
B)$120,000 loss
C)$450,000 gain
D)$570,000 gain
E)None of the above
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Chapter 21: Partnerships
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Q1) ABC LLC reported the following items on the LLC's Schedule K: ordinary income,$100,000; interest income,$3,000; long-term capital loss,($4,000); charitable contributions,$1,000; post-1986 depreciation adjustment,$10,000; and cash distributions to partners,$50,000.How much will ABC show as net income (loss) on its Analysis of Income (Loss)?
A)$68,000
B)$78,000
C)$95,000
D)$98,000
E)$102,000
Q2) Which one of the following is not an item that should be documented in the partnership (or LLC operating) agreement?
A)Allocations of cash flows.
B)Allocations of profits and losses.
C)Liquidating distributions.
D)Partners' rights in managing the partnership.
E)All of the above should be documented.
Q3) What are "syndication costs" and how are they treated for tax purposes?
Q4) Limited liability company
Q5) Partner's capital account
Page 23
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Chapter 22: S Corporations
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Q1) A two-or-more member ____________________ operates under ____________________ tax principles.
Q2) Which type of distribution from an S corporation is taxed at ordinary income rates?
A)AAA.
B)PTI
C)OAA
D)AEP
E)None of the above.
Q3) Which statement is incorrect with respect to the number-of-shareholders test in filing an S election?
A)Husband Jaime and wife Maria count as one shareholder.
B)Grandmother Adela and granddaughter Maria count as one shareholder.
C)Husband Jaime and the estate of wife Maria count as one shareholder.
D)Husband Jaime and ex-wife Isabel count as one shareholder.
E)None of the above statements is incorrect.
Q4) Pepper,Inc.,an S corporation in Norfolk,Virginia,has revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.Calculate any passive investment income penalty tax payable by this corporation.
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Chapter 23: Exempt Entities
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Q1) Which of the following statements is correct regarding the unrelated business income tax (UBIT)?
A)To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization.
B)To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization.
C)To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year.
D)An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT.
E)None of the above statements is correct.
Q2) Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?
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Chapter 24: Multistate Corporate Taxation
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Q1) Roughly five percent of all taxes paid by businesses in the U.S.are to state,local,and municipal jurisdictions.
A)True
B)False
Q2) An assembly worker earns a $50,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $65,000 for this employee.
A)True
B)False
Q3) Parent and Junior form a unitary group of corporations.Parent is located in a state with an effective tax rate of 3%,while Junior's effective tax rate is 9%.Acting in concert to reduce overall tax liabilities,the group should:
A)Execute an intercompany loan, such that Junior pays deductible interest to Parent.
B)Have Parent charge Junior an annual management fee.
C)Shift Parent's high-cost assembly and distribution operations to Junior.
D)All of the above are effective income-shifting techniques for a unitary group.
E)None of the above is an effective income-shifting technique for a unitary group.
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Chapter 25: Taxation of International Transactions
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Q1) The U.S.system for taxing income earned outside its borders by U.S.persons is referred to as the territorial approach,because only income earned within the U.S.border is subject to taxation.
A)True
B)False
Q2) Hendricks Corporation,a domestic corporation,owns 40 percent of Shane Corporation and 55 percent of Ferrell Corporation,both foreign corporations.Ferrell owns the other 60 percent of Shane Corporation.Both Shane and Ferrell are CFCs.
A)True
B)False
Q3) ForCo,a foreign corporation not engaged in a U.S.trade or business,recognizes a $3 million gain from the sale of land located in the United States.The amount realized on the sale was $50 million.Absent any exceptions,what is the required withholding amount on the part of the purchaser of this land?
A)$0
B)$300,000
C)$3 million
D)$5 million
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Chapter 26: Tax Practice and Ethics
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Source URL: https://quizplus.com/quiz/71547
Sample Questions
Q1) The accuracy-related penalties typically relate to ____________________on the part of the taxpayer,or other understatements of tax.
Q2) Under Circular 230,tax preparer Winston cannot disclose to a mortgage banker the income level of her client Pickett,or other information acquired by preparing the return,without Pickett's permission.
A)True
B)False
Q3) The taxpayer can avoid a valuation penalty for overstating the value of the charitable contribution of an artwork by showing that the deduction claimed was based on a qualified ____________________.
Q4) Compute the failure to pay and failure to file penalties for John,who filed his 2016 income tax return on December 14,2017,paying the $10,000 amount due.On April 1,2017,John submitted a six-month extension of time in which to file his return; he paid no tax with the extension request.He has no reasonable cause for failing to file his return by October 15,or for failing to pay the tax that was due on April 15,2017.John's failure to comply with the tax laws was not fraudulent.
Q5) The chief executive of the IRS is the _________________________.
Q6) Misstatement of withholding allowances.
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Chapter 27: The Federal Gift and Estate Taxes
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71546
Sample Questions
Q1) State income tax refund received after death on a tax return filed before death.
A)Some or all of the asset is included in the decedent's gross estate.
B)None of the asset is included in the decedent's gross estate.
Q2) A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.
A)True
B)False
Q3) In the case of a transfer by gift,a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.
A)True
B)False
Q4) Meg gives her 18-year-old son money for his college tuition and living expenses (e.g.,room and board).
A)No taxable transfer occurs
B)Gift tax applies
C)Estate tax applies
Q5) Inheritance tax
Q6) Tenancy in common
Q7) QTIP election
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Chapter 28: Income Taxation of Trusts and Estates
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167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71545
Sample Questions
Q1) The Malik Estate operates a manufacturing business.Malik made no income distributions this year.It can claim the full deduction for the MACRS depreciation of the assets of the business.
A)True
B)False
Q2) Jose is subject to the top marginal Federal income tax rates.Carlita is considering establishing a trust in which Jose would be an income beneficiary.Considering only income tax consequences,Jose should be designated as:
A)A first-tier beneficiary.
B)A second-tier beneficiary.
C)Only a remainder beneficiary.
D)Both a first- and a second-tier beneficiary.
Q3) Judy can claim one-third of the Sweet Estate's cost recovery deductions,because she received one-third of the fiduciary's distributable net income (DNI).
A)True
B)False
Q4) The entity was created by either a decedent or a living person.
Q5) A trust that is required to distribute annual accounting income.
Q6) The fiduciary in charge of a trust.
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