if a trust or estate has business income reportable on Sched

if a trust or estate has business income reportable on Schedule C, which of the following is true?

a) the beneficiaries are subject to SE tax on the income if it is required to be, or is actually, distributed.

b) the trust, estate and beneficiaries are all subject to SE tax on the business income.

c) the trust, estate & beneficiaries are not subject to SE tax on the business income.

d) the trust & estate are subject to SE tax if the income is not distributed to the beneficiaries.

Solution

If the estate or trust operates any business or trade and received any income from it, the same need to reported in Schedule C of form 1040 and the same is taxed in the hands of benificiery that is Sole properitor. So self employement tax need to be paid by the individual who earns from the trust or estate.

So answer is Option a)