A grantor transfers 1 million to an irrevocable trust


A grantor transfers $1 million to an irrevocable trust naming his three children as beneficiaries. A bank is the trustee and a spray provision is included in the trust instrument. What are the consequences of this transfer?

a. The grantor can take an annual exclusion for each trust beneficiary to reduce the taxable portion of the gift to $958,000

b. If the bank distributes $20,000 to one trust beneficiary this year, the grantor can take an annual exclusion of $14,000

c. The bank can make discretionary distributions of both income and corpus to the trust beneficiaries

d. The bank can only make discretionary distributions of income to the trust beneficiaries

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Financial Management: A grantor transfers 1 million to an irrevocable trust
Reference No:- TGS01710779

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