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Exam 28: Income Taxation of Trusts and Estates

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Question 21

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How does the alternative minimum tax affect fiduciary entities?

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

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Question 22

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The trustee of the Miguel Trust can distribute any amount of accounting income and corpus to the trust's income beneficiaries,Paula and George.This year,the trust incurred the following. The trustee distributed $40,000 to Paula and $40,000 to George.

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* 40/60 * $6,000
** $20,000 - $2,0...

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Question 23

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

The Roz Trust has 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 $80,000 to Roger and $80,000 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 $20,000 to Roger and $20,000 to Sally.How much gross income from the trust must Sally recognize?

Which,if any,of the following statements relates to the tax treatment of both estates and trusts?

The Watson Trust incurred the following items during the year. What is Watson's deduction for the tax preparation fees?

Every ____________________ trust is allowed a $____________________ personal exemption.

The Rodriguez Trust generated $200,000 in alternative minimum taxable income (AMTI) this year.The trust is subject to a marginal Federal income tax rate of:

Can an estate or trust claim any tax credits against its Federal income tax liability? Explain.

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

By____________________ various items to entity accounting income,the will or trust determines the size of the distribution to the income beneficiaries.

Which of the following is a typical duty of a trustee?

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

A ____________________ tier distribution is one that must be made by the fiduciary to the beneficiary.

A complex trust may incur a liability for the AMT.

Delphi is a complex trust.This year it distributed all of its accounting income and $1,000 from corpus.Delphi's taxable income for the year is:

With respect to a selling expense incurred by an estate in disposing of the decedent's property,a deduction can be claimed on the Form 706 only if the executor waives the corresponding deduction in computing the estate's Federal income tax.

What is meant by the term "distributable net income?" What is its significance in connection with the income taxation of estates,trusts and their beneficiaries?

An estate cannot claim a § 199 domestic production activities deduction,as the deduction passes through to the income beneficiaries.

Under the general rules of Subchapter J,whoever receives the ____________________ income of a trust or estate is the one who pays tax on it.