he Franklins set up an irrevocable trust for the rest of their grandchildren, what kind of tax will the andchildren pay on the income distributed to them from this trust? CHOOSE ALL that apply.

If the Franklins set up an irrevocable trust for the rest of their grandchildren, what kind of tax will the grandchildren pay on the income distributed to them from this trust? CHOOSE ALL that apply. If the income is capital gains to the trust and distributed to the grandchildren, it will be capital gains to the grandchildren. Any income/capital gains retained in the trust will be taxed at the trust's tax rate. Income distributed to the children could be subject to kiddie tax if they are under 18 . Interest income distributed to the grandchildren will be taxed as ordinary income. Any distributions of the corpus (principle) will not be taxable to the grandchildren. Any income/capital gains retained in the trust will be taxed at the grandchildren's tax rate