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

Essay

Review LaterAdd Note

Review Later

List the three major functions of distributable net income (DNI) as that amount is used under Federal income tax law.

Correct Answer

verified

Show Answer

Question 72

Short Answer

Review LaterAdd Note

Review Later

Every ____________________ trust is allowed a $300 personal exemption.

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

The Taft Estate was established when Winnie Taft died on March 1, 2012. It selects a fiscal Federal income tax year that ends on October 31. For which tax year ending October 31 must Taft begin to make quarterly estimated Federal income tax payments?

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

This year, the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI) . Nano distributed $60,000 cash to Horatio, its sole income beneficiary. Nano is a simple trust. Nano's distribution deduction is:

In computing Federal taxable income, can the trust or estate use its distributable net income (DNI) as its deduction for distributions to beneficiaries? Explain.

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

In computing distributable net income (DNI) for a trust, one removes any corpus net capital gain or loss.

Trusts can select any fiscal Federal income tax year.

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.

Explain how the Federal income tax law applies to a fiduciary entity like a trust. Is the tax structure similar to that of an individual? A partnership?

Judy can claim one-third of the Sweet Estate's cost recovery deductions, because she received one-third of the fiduciary's distributable net income (DNI).

The Zhao 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 Zhao, 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?

Under the Federal income tax rules for fiduciary entities, a(n) ____________________ generally must use a calendar tax year, but a(n) ____________________can select any tax year-end.

Beneficiary Terry received $30,000 from the Urgent Trust.Trust accounting income for the year was $50,000.The trust generated $20,000 in cost recovery deductions.How much can Terry deduct with respect to the cost recovery deductions that Urgent generated?

If provided for in the controlling agreement, a trust might terminate when the income beneficiary reaches age 35.

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

The distributable net income (DNI) of a fiduciary taxpayer:

This year, the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI) . Nano distributed $30,000 cash to Horatio, its sole income beneficiary. Nano is a complex trust. Nano's distribution deduction is:

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?