FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 28: Income Taxation of Trusts and Estates

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

True/False

Review LaterAdd Note

Review Later

An example of income in respect of a decedent is the taxpayer's last paycheck,uncollected at death.

A) True
B) False

Correct Answer

verified

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

Kip and his wife Biddie file calendar-year Form 1040 joint returns.Kip died this year on April 16.The Form 1040 is filed as a joint return,signed by Biddie and by Kip's executor.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

Essay

Review LaterAdd Note

The Prasad Trust incurred the following items: Taxable interest income $50,000 Tax-exempt interest income,not on private activity bonds 25,000 Tax-exempt interest income,on private activity bonds 5,000 Compute Prasad's tentative minimum tax for the year.Prasad does not hold any credits available to reduce the AMT liability.

"First-tier distributions" allowed by the will or trust document are made at the discretion of the executor or trustee.

A ____________________ (first,second,third) -tier distribution is one that the trust agreement requires to be made by the trustee to the income beneficiary.

The Julius Trust made a gift to the United Charity on August 1,Year Two,from its Year One business profits.The trust's charitable contribution deduction can be claimed in either Year One or Year Two.

Harry,the sole income beneficiary,received a $40,000 distribution from the Lucy Trust,in a year when the trust's distributable net income was $30,000.Harry's AGI can increase by as much as $40,000.

A fiduciary entity computes its alternative minimum tax in a manner similar to that used for a(n) ____________________.

For each of the following items, insert the best term or phrase. An answer choice may be used more than once, but only one choice is the best for each descriptive phrase. a.Complex b.Decedent c.Executor d.Grantor e.Living f.Reversionary g.Simple h.Sprinkling i.Trustee -The person who transfers assets to a trust.

The tax rules regarding the income taxation of trusts and estates are included in which Subchapter of the Internal Revenue Code?

Counsell is a simple trust that correctly uses the calendar year for tax purposes.Its income beneficiaries (Kathie,Lynn,Mark,and Norelle) are entitled to the trust's annual accounting income in shares of one-fourth each.For the current calendar year,the trust has ordinary business income of $40,000,a long-term capital gain of $20,000 (allocable to corpus),and a trustee commission expense of $4,000 (allocable to corpus).Use the format of Exhibit 20.5 in the text to address the following items. a.How much income is each beneficiary entitled to receive? b.What is the trust's DNI? c.What is the trust's taxable income? d.How much is taxed to each of the beneficiaries?

The Prakash Estate has equal income beneficiaries Sam and Janet.As allowed by the terms of the will,the estate makes no income distributions during the current tax year.The estate's personal exemption is:

The Stratford Estate incurs a $25,000 casualty loss in disposing of the real property of the decedent.The deduction is claimed against the Federal estate tax,unless by election it is claimed on the estate's income tax return.

An estate's remainder beneficiary generally must wait until the entity is terminated by the executor to receive any distributions.

The IRS encourages ____________________ (paper,electronic,composite) filing for Forms 1041.

Harry,the sole income beneficiary,received a $40,000 distribution from the Lucy Trust,in a year when the trust's distributable net income was $50,000.Harry's AGI can increase by as much as $50,000.

Three weeks after Abed died,his brother Tony properly received Abed's last paycheck from his employer.The gross amount of the check was $4,000,and a $300 deduction for state income taxes was subtracted in computing the net amount of the payment.Which of the following statements is true?

Tax planning usually dictates that high-income and high-wealth individuals be specified as second-tier beneficiaries of a trust arrangement.

In computing the Federal taxable income of a trust,a modified ____________________ approach is used.

Your client Ming is a complex trust that operates exclusively in the U.S.Make a list of five or more tax planning opportunities that you might suggest to Ming.