With the opening of a local casino, the Bank of Red River is having record earnings. The bank’s increased profits and the new casino are the direct result of the bank’s president, Mortimer Rock. The bank wants to establish a secular trust for Mortimer. Which of the following statements is or are correct?

I. Mortimer will be able to defer income tax on a portion of his current income.

II. The plan assets are subject to the creditors of XYZ Bank of Red River.

III. The plan is unfunded.

IV. Employee income taxation will occur at the time the contribution is made to the trust.

A. All of the above.

B. I, II.

C. II, IV.

D. IV.