Benchmark Assignment

Benchmark Assignment

Q. no. 1: A non-grantor foreign trust sells appreciated trust assets in 2013 and makes no distributions to U.S. beneficiaries in 2013 but makes distributions to U.S. beneficiaries in 2014. Will the capital gains rate of tax apply when distributed in 2014?

Answer: Yes. According to the law, if capital gained income held for more than one year than they are generally taxed at a relatively higher, also known as special long-term, capital gain rates. Thus, if no distribution is made in 2013 makes distribution in 2014, than a special long-term capital gains rate of tax will apply.

Q. no. 2: ...