Under Frederic's Will, a trust was established for his three children during their lifetimes, with the remainder passing per stirpes. During 2016, the trust generated $10,000 in qualifying dividend income, $5,000 in taxable interest income, and $20,000 in long term capital gains. The Trustee was paid a trustee's commission in the amount of $3,000. The Trust's net accounting income was distributed in equal shares to Frederic's three children during 2016. Which Answer Option below is correct?

Group of answer choices

The Trustee's commission is not income taxable to the Trustee

All net income will be taxed to the trust as well as the capital gains.

The beneficiaries will receive income in the same character and proportion as that received by the trust

The trustee can tax the dividend income to the chlldren and the interest income and capital gains to the trust.

Answer rating: 100% (QA)

Since we know that the trust is a taxable entity The beneficiaries usual... View the full answer