Exam Question 9 of 50 Select the best answer The amount elec

Exam Question 9 of 50 Select the best answer. The amount elected to be treated as a prior year distribution under IRC 5663(b): should normally be zero since trusts and estates have more favorable tax brackets than do individuals A. ??. is limited to amounts actually paid or credited during the 65 days after the end of the trust\'s or estate\'s tax year O C. can be more than distributable net income for the tax year in question. O D. must be consented to by any beneficiary whose K-1 is affected by the election. Submit Answers

Solution

The amount elected to be treated as a prior year distribution under IRC 663(b) is limited to the amount actually paid or credited during the 65 days after the end of the trust\'s or estate tax year.

Therefore answer is option (B)

Explanation-

With respect to taxable years beginning after December 31, 1968, the fiduciary of a trust may elect under section(b) to 663 treat any amount or portion thereof that is properly paid or credited to a beneficiary with in the first 65 days following the close of the taxable year as an amount that was properly paid or credited on the last day of such taxable year.

In other words, the trustee gets 65 days after the actual close of the year to calculate how much income should have been distributed and then actually make that distribution.