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 71

True/False

Review LaterAdd Note

Review Later

When DNI includes exempt interest income, the beneficiary includes less than the full amount of DNI in current-year gross income.

A) True
B) False

Correct Answer

verified

Show Answer

Question 72

Essay

Review LaterAdd Note

Review Later

Is a trust subject to the alternative minimum tax? Or does the trust "pass through" AMT items to its grantor and beneficiaries?

Correct Answer

verified

An estate or trust is subject to the alt...

View Answer

Show Answer

Question 73

True/False

Review LaterAdd Note

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.

Estates and trusts can claim Federal income tax deductions for costs incurred in maintaining investments in U.S.state and local bonds.

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

Which of the following taxpayers use a Schedule K and K-1 to pass through income, loss, and credit amounts to the owners or beneficiaries?

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

When a beneficiary receives a distribution from a trust of an asset other than cash, the realized loss could be disallowed under the ____________________ rule.

The Crown Trust distributed one-half of its accounting income to Lee this year.Lee also is allocated one-half of Crown's credit for building low-income housing.

Tax planning motivations usually are secondary to other objectives in deciding whether to create a trust.

Bob is one of the income beneficiaries of the LaQuanda Estate, which is subject to a 45% marginal Federal estate tax rate, a 35% marginal Federal income tax rate, and a 5% marginal state income tax rate.This year, Bob received all of the sales commissions that were earned and payable to Lulu LaQuanda (cash basis) at her death.Compute Bob's § 691(c) deduction for the current year, given the following data.

An estate operates a manufacturing business. It can claim a domestic production activities deduction (DPAD).

Generally, capital gains are allocated to fiduciary income, because they arise from current-year transactions as directed by the trustee.

Three months after Brianna Timkin died, her executor received the final $40,000 installment from a sale of land that Brianna completed several years ago.Which of the following statements is true?

The decedent's estate must terminate within four years of the date of death.

The Purple Trust incurred the following items this year. Compute Purple's tentative minimum tax for the year.Purple does not have any credits available to reduce the AMT liability.

The Griffin Trust makes a gift to a qualifying charity. Griffin's entity-level deduction is allowed only to the extent of 50% of distributable net income.

Which of the following is the annual maximum amount to be included as gross income by all of the income beneficiaries of the trust or estate?

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

A Form 1041 must be filed by an estate that recognizes $____________________ or more gross income for the tax year.