Question 1

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.
-An estate always is created upon the death of this party.

Accepted Answer

A) Complex 
B) Decedent 
C) Executor 
D) Grantor 
E) Living
F)Reversionary
G)Simple
H)Sprinkling
I)Trustee

Question 2

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

Accepted Answer

A) Complex trust. 
B) Partnership. 
C) Limited liability company. 
D) All of the above taxpayers are passthrough entities, and they never are subject to an entity-level Federal income tax.

Question 3

For each of the following independent statements, choose the best answer.
-The entity must file an income tax return if its gross income for the year is $600 or more.

Accepted 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

Question 4

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:

Accepted Answer

A) $0. 
B) $100. 
C) $300. 
D) $600.

Question 5

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

Accepted Answer

The answer of The rental income of a trust usually...

Question 6

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

Accepted Answer

A) The termination date of the entity is specified in the controlling document. 
B) The entity must use the same tax year as its creator (i.e., grantor, decedent). 
C) The entity is required to distribute all of its income currently to its beneficiaries. 
D) In the year of its termination, the entity's net operating loss carryovers are passed through to its beneficiaries.

Question 7

The Code defines a "simple trust" as which of the following?

Accepted Answer

A) One which is allowed to file Form 1041-EZ. 
B) One which has only one income beneficiary. 
C) One whose grantor was an individual who still is alive. 
D) One which must distribute its accounting income every year.

Question 8

A complex trust is automatically exempt from the Federal AMT.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A) The $300 is deductible on neither Tony's income tax return nor on Abed's estate tax return. 
B) The $300 is deductible both on Tony's income tax return and on Abed's estate tax return. 
C) The $300 is deductible only in computing Abed's taxable estate. 
D) The $300 is deductible only on the income tax return of Abed's estate.

Question 10

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

Accepted Answer

A) C 
B) J 
C) K 
D) S

Question 11

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

Accepted Answer

The answer of The Form 1041 of a calendar-year trust...

Question 12

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.
-The fiduciary in charge of an estate.

Accepted Answer

A) Complex 
B) Decedent 
C) Executor 
D) Grantor 
E) Living
F)Reversionary
G)Simple
H)Sprinkling
I)Trustee

Question 13

In 2016, the Prasad Trust incurred the following items:

Accepted Answer

The answer of In 2016, the Prasad Trust incurred the...

Question 14

The Yellow Trust incurred $10,000 of portfolio income. Its corporate trustee paid fiduciary fees of $1,000 therefrom, and also paid $1,000 in premiums for a life insurance policy on Marcia, the grantor of the trust. How much gross income does Marcia include with respect to these trust activities?

Accepted Answer

A) $10,000 
B) $9,000 
C) $1,000 
D) $800

Question 15

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.
-The fiduciary in charge of a trust.

Accepted Answer

A) Complex 
B) Decedent 
C) Executor 
D) Grantor 
E) Living
F)Reversionary
G)Simple
H)Sprinkling
I)Trustee

Question 16

For each of the following independent statements, choose the best answer.
-​The entity is an information-reporting, not a tax-paying, taxpayer.

Accepted 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

Question 17

The Stratford Estate incurs a $25,000 legal fee in disposing of the real property of the decedent. The executor can decide to claim a $5,000 deduction against the Federal estate tax, and a $20,000 deduction on the estate's income tax return.

Accepted Answer

A) True 
 B)False

Question 18

Reyes contributed assets to a trust, designating daughter Maria as the income beneficiary, and grandson Julio as the remainder beneficiary. This year, fiduciary accounting income was $50,000. The trustee paid $5,000 of this amount as Julio's high school tuition. Reyes pays Federal income tax on $5,000 for the year.

Accepted Answer

A) True 
 B)False

Question 19

The Whitmer Trust operates a manufacturing business and distributes the profits to its income beneficiaries. Whitmer also passes through to the income beneficiaries the data needed to compute their domestic production activities deduction.

Accepted Answer

A) True 
 B)False

Question 20

Sixty percent of the income received by the Atom Trust this year constituted municipal bond interest. Atom's trustee also made a $100,000 gift to the United Fund, a qualifying charity. The charitable deduction associated with this gift is limited to $60,000.

Accepted Answer

A) True 
 B)False

Exam 20: Income Taxation of Trusts and Estates

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. -An estate always is created upon the death of this party.

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

For each of the following independent statements, choose the best answer. -The entity must file an income tax return if its gross income for the year is $600 or more.

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

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

The Code defines a "simple trust" as which of the following?

A complex trust is automatically exempt from the Federal AMT.

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?

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

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

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. -The fiduciary in charge of an estate.

In 2016, the Prasad Trust incurred the following items:

The Yellow Trust incurred $10,000 of portfolio income. Its corporate trustee paid fiduciary fees of $1,000 therefrom, and also paid $1,000 in premiums for a life insurance policy on Marcia, the grantor of the trust. How much gross income does Marcia include with respect to these trust activities?

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. -The fiduciary in charge of a trust.

For each of the following independent statements, choose the best answer. -The entity is an information-reporting, not a tax-paying, taxpayer.

The Stratford Estate incurs a $25,000 legal fee in disposing of the real property of the decedent. The executor can decide to claim a $5,000 deduction against the Federal estate tax, and a $20,000 deduction on the estate's income tax return.

The Whitmer Trust operates a manufacturing business and distributes the profits to its income beneficiaries. Whitmer also passes through to the income beneficiaries the data needed to compute their domestic production activities deduction.

Sixty percent of the income received by the Atom Trust this year constituted municipal bond interest. Atom's trustee also made a $100,000 gift to the United Fund, a qualifying charity. The charitable deduction associated with this gift is limited to $60,000.

Exam 20: Income Taxation of Trusts and Estates

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. -An estate always is created upon the death of this party.

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

For each of the following independent statements, choose the best answer. -The entity must file an income tax return if its gross income for the year is $600 or more.

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

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

The Code defines a "simple trust" as which of the following?

A complex trust is automatically exempt from the Federal AMT.

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?

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

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

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. -The fiduciary in charge of an estate.

In 2016, the Prasad Trust incurred the following items:

The Yellow Trust incurred $10,000 of portfolio income. Its corporate trustee paid fiduciary fees of $1,000 therefrom, and also paid $1,000 in premiums for a life insurance policy on Marcia, the grantor of the trust. How much gross income does Marcia include with respect to these trust activities?

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. -The fiduciary in charge of a trust.

For each of the following independent statements, choose the best answer. -​The entity is an information-reporting, not a tax-paying, taxpayer.

The Stratford Estate incurs a $25,000 legal fee in disposing of the real property of the decedent. The executor can decide to claim a $5,000 deduction against the Federal estate tax, and a $20,000 deduction on the estate's income tax return.

The Whitmer Trust operates a manufacturing business and distributes the profits to its income beneficiaries. Whitmer also passes through to the income beneficiaries the data needed to compute their domestic production activities deduction.

Sixty percent of the income received by the Atom Trust this year constituted municipal bond interest. Atom's trustee also made a $100,000 gift to the United Fund, a qualifying charity. The charitable deduction associated with this gift is limited to $60,000.

For each of the following independent statements, choose the best answer. -The entity is an information-reporting, not a tax-paying, taxpayer.