Question 60 of 75. Which of the statements below regarding the net capital gain or loss of a trust is NOT correct? In the final year of a trust or estate, any unused capital loss carryover is passed through to the remainder beneficiaries and keeps its original character. Net capital gain is typically allocated to corpus, although it can be allocated to income if permitted by the trust instrument or local law. Net long-term capital gain of a trust or estate is taxed at 25%. Net capital loss is allocated to corpus, except in the final year of the trust or estate. Mark for follow up Which of the following statements regarding taxation of trust income is correct? A trust is taxed on retained income, but beneficiaries are not taxed on trust income disbursed to them. A trust is taxed on income it retains, and beneficiaries are taxed on trust income distributed to them. A trust is taxed on income it distributes to beneficiaries, and beneficiaries are taxed on income the trust retains. The trust and beneficiaries are both taxed on all trust income. Mark for follow up