An irrevocable, taxable trust worth $100,000 earns $800 of dividend income, $400 of interest income, and $2,000 in capital gains from the sale of some stock, for a total income of $3, 200. The only expenses is the trustee's fee of $200, which is paid entirely from the interest and dividend income. The trustee distributes all of the net ordinary income to the beneficiaries. Who pays the tax on the income of the trust? (a) The beneficiaries pay tax on $1,000 of net ordinary income ($800 dividends + $400 interest - $200 trustee's fee). The trust pays tax on the $2,000 of capital gain retained in the trust. (b) The beneficiaries pay tax on $1, 200 of interest and dividend income. The trust pays tax on $2,000 of capital gain, less the $200 trustee's fee, or $1, 800. (c) The beneficiaries pay tax on $1,000 of net ordinary income and also pay the tax on the $2,000 of capital gain. (d) The trust pays tax on $3,000 of income ($800 dividends + $400 interest + $2,000 capital gains - $200 trustee's fee.) The beneficiaries pay tax on none of the trust income