Papa makes a gift in trust of $1 million, arranging for the trust to pay...
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Accounting
Papa makes a gift in trust of $1 million, arranging for the trust to pay income to his son for his life with the remaining property at his son's death passing equally to the son's children. The trustee has the right to invade the principal during the son's life for the health, support, and maintenance of any of son's children. The trustee decides to invade the principal to write checks to the colleges attended by each of the son's children for their tuition. Which type of generation-skipping transfer has occurred when the trustee makes the distribution?
a. No GST has occurred.
b. A direct skip has occurred.
c. A taxable termination has occurred.
d. A taxable distribution has occurred.
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