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Exam 28: Income Taxation of Trusts and Estates

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Question 81

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Generally,an administrative expense attributable to municipal bond interest should be claimed on the estate's Form 706.

A) True
B) False

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Question 82

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The Form 1041 of a calendar-year trust is due on ____________________ 15 (not including extensions) of the following year.

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Question 83

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The Cai Trust is a calendar-year taxpayer.Its Form 1041 is due on which date in the following year?

A fiduciary's cost recovery deductions are assigned corresponding to the disposition of entity ____________________ income for the year.

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.

Identify the parties that are present when an estate is created,and their key duties.Then do the same for a trust.

The Circle Trust reports some exempt interest income for the year.How does this investment income affect Circle's deduction of its fiduciary fees? Charitable contributions?

For each of the following independent statements, choose the best answer. a.Tax attribute of complex trusts only b.Tax attribute of estates only c.Tax attribute of estates and complex trusts d.Tax attribute of neither estates nor complex trusts -​The entity is an information-reporting,not a tax-paying,taxpayer.

For each of the following independent statements, choose the best answer. a.Tax attribute of complex trusts only b.Tax attribute of estates only c.Tax attribute of estates and complex trusts d.Tax attribute of neither estates nor complex trusts -​A decedent created the entity.

The Malik Estate operates a manufacturing business.Malik made no income distributions this year.It can claim the full deduction for the MACRS depreciation of the assets of the business.

Every simple trust is allowed a $____________________ personal exemption.

For each of the following independent statements, choose the best answer. a.Tax attribute of complex trusts only b.Tax attribute of estates only c.Tax attribute of estates and complex trusts d.Tax attribute of neither estates nor complex trusts -The entity must file an income tax return if its gross income for the year is $600 or more.

The rental income of a trust usually is allocable to ____________________ (income,remainder) beneficiaries.

The trust usually makes a distribution to the income beneficiaries in the amount of its fiduciary ____________________ income.

The Doyle Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources.Under the terms of the trust instrument,the trustee must distribute $20,000 to Roger and $20,000 to Sally.After paying these amounts,the trustee is empowered to make additional distributions at its discretion.Exercising this authority,the trustee distributes an additional $25,000 to Roger and $50,000 to Sally.How much gross income from the trust must Roger recognize?

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.

Olsen has been determined to be a grantor trust by the IRS.What are the tax consequences of this tax status? What are the tax return filing requirements for Olsen and for Peggy,the donor of the trust's assets?

Income beneficiary Turk received $30,000 from the Urgent Trust.Trust accounting income for the year was $100,000.The trust generated $20,000 in cost recovery deductions.How much can Turk deduct with respect to the cost recovery deductions that Urgent generated?

The deduction for the Sharma Trust's $100,000 gift to charity is ____________________ when one-third of Sharma's accounting income for the tax year constitutes exempt interest income.

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.Administrator f.Reversionary g.Simple h.Sprinkling i.Trustee -A trust that is required to distribute annual accounting income.