Robert transferred $100,000 to an irrevocable trust for the benefit of his minor child, Dominic. The transfer was eligible for the annual exclusion. The trust permits the trustee to accumulate trust income within the trust, and only make distributions to Dominic based upon an ascertainable standard until Dominic is 21 years old. When Dominic attains the age of 21, the trust must terminate and the trust assets must be distributed to Dominic. Which type of trust has Robert created?
| A. |
Intentionally defective grantor trust (IDGT) |
|
| B. |
2503(b) trust |
|
| C. |
2503(c) trust |
|
| D. |
Totten trust |
Robert has created a trust for his minor child.
The transfer made by Robert is eligible for annual exclusion.
The amount of trust would be transferred to minor child when he will attain the age of 21.
A trust that is created for benefit of minor and to avoid the gift tax to be paid and the minor receives property at the age of 21 is said to be 2053(c) trust.
So,
Robert has created the 2053(c) trust.
Hence, the correct answer is the option (c)
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