Question: Grace creates a trust that requires all income to be paid to her niece, Nelly, currently. Grace retains the right to withdraw 1⁄2 of the trust assets at any time. The trust has $5,000 of ordinary income, $1,000 of interest deductions, and $50,000 of capital gain. a. What are the income tax consequences for Grace? b. Nelly receives a mandatory distribution of all income ($5,000). income tax consequences for Nelly? c. What are the income tax consequences for the trust?