Please review the related sections of the tax code, including publications 990 and 990-PF.

Scenario: John transfers investment securities worth $200,000 with a tax basis of $130,000 to a trust, naming himself as trustee. The terms of the trust agreement require the trustee to pay all dividends and interest to John's brother, Dale. John has the right to revoke the trust at any time and take back title to the securities. During the trust's first year, John, as trustee, distributes $20,000 in dividends and $10,000 interest from the securities to Dale.

Explain to John and Dale the special rules that apply to trusts where the creator (grantor) of the trust retains certain rights.