ATT Exam #1 Questions with 100% Correct Answers

ATT Exam #1 Questions with 100% Correct Answers Personal Residence Grantor Retained Interest Trust - Answer-Gift and estate planning. Inter vivos trust when grantor retains the right to occupy trust property as a personal residence for a term of years. Remainder goes to family members. The grantor cannot be the holder of an interest in more than two such trusts at the same time. Tax consequences to grantor include the normal deductions relative to ownership of a personal residence such as property taxes and interest. Trust is typically drafted with a retained contingent power or reversion that also will cause corpus gains and losses to be attributed to grantor. Grantor Retained Interest in Tangible Property Trusts - Answer-Gift and estate tax planning. Inter vivos trust in which grantor retains the right to use and enjoy certain tangible property for a term of years. Remainder passes to family members. No income is typically generated, no tax consequences exist. Income Sprinkling Trust - Answer-The trustee is given the power to either "sprinkle" or accumulate income as he thinks best. Typically the beneficiaries are the children of the settlor. Distributed income is taxed to beneficiary. Accumulated income is taxed to fiduciary. Income Trust or Section 2503(b) Trust** - Answer-Gift and estate tax planning. All income must be distributed to the beneficiary at least annually.