All of the following statements concerning the nature and characteristics of simple trusts are correct, EXCEPT: A. It is a separate entity for federal income tax purposes. B. Trust income is taxable to the beneficiaries in the year in which it is distributed. C. Trust income may be accumulated, but it is taxable to the beneficiaries in the year in which it is earned. C D. The grantor conveys to the trustee legal title to the trust property