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Exam 28: Income Taxation of Trusts and Estates

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Question 41

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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.

A) True
B) False

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Question 42

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The unextended due date for a calendar-year trust to file its Form 1041 is March 15.

A) True
B) False

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Question 43

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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.

The Edgerton Estate generated distributable net income (DNI) this year of $100,000,one-fourth of which was tax-exempt interest,and the balance of which was long-term capital gain.Kyle Edgerton,the sole income beneficiary of the Estate,received a distribution of the entire $125,000 accounting income of the entity.How does Kyle report the distribution?

The first step in computing an estate's taxable income is the determination of its gross income for the year.

Which of the following taxpayers can be subject to an entity-level Federal income tax?

This year,the Huang Trust distributed all of its accounting income and $1,000 from corpus.Huang's taxable income for the year is:

The Suarez Trust generated distributable net income (DNI) this year of $150,000,one-third of which was portfolio income,and the balance of which was exempt interest.Under the terms of the trust,Clara Suarez is to receive an annual income distribution of $30,000.At the discretion of the trustee,additional distributions can be made to Clara,or to Clark Suarez III.This year,the trustee's distributions to Clara totaled $90,000.Clark also received $90,000.How much of the trust's DNI is assigned to Clark?

Generally,an estate's taxable income is computed in a manner similar to that used for a(n)____________________.

Which of the following is a typical duty of an executor?

Which of the following restrictions applies concerning distributions to trust beneficiaries?

The Gable Trust reports $20,000 business income and $10,000 exempt interest income,and it paid a $3,000 fiduciary fee.Gable's distributable net income (DNI)includes $9,000 for the interest income.

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

The Leonardo Estate operates a business and generates cost recovery deductions.Which taxpayer(s),if any,can deduct these items,e.g.,the deceased,the estate,the income or remainder beneficiaries?

With respect to a timely filed Form 1041 for a trust based in Delaware,the IRS will accept:

The Form 1041 of a calendar-year trust is due on ____________________ 15.

Every ____________________ trust is allowed a $300 personal exemption.

The Gable Trust reports $20,000 business income and $10,000 exempt interest income,and it paid a $3,000 fiduciary fee.Gable's distributable net income includes $10,000 for the interest income.

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

Three months after Emma Timkin died,her executor received the final $10,000 installment of Emma's Super Lottery winnings from the state.Which of the following statements is true?