FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 20: Income Taxation of Trusts and Estates

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Essay

Review LaterAdd Note

Review Later

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.

Correct Answer

verified

Estimated tax payme...

View Answer

Show Answer

Question 82

Essay

Review LaterAdd Note

Review Later

Your client Ming is a complex trust that operates exclusively in the U.S.Make a list of five or more tax planning opportunities that you might suggest to Ming.

Correct Answer

verified

Where fiduciary entities are u...

View Answer

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

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

Counsell is a simple trust that correctly uses the calendar year for tax purposes.Its income beneficiaries (Kathie,Lynn,Mark,and Norelle)are entitled to the trust's annual accounting income in shares of one-fourth each.For the current calendar year,the trust has ordinary business income of $40,000,a long-term capital gain of $20,000 (allocable to corpus),and a trustee commission expense of $4,000 (allocable to corpus).Use the format of Figure 20.3 in the text to address the following items.

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

Tax professionals use the terms simple trust and complex trust when dealing with fiduciary arrangements.How does one know whether a trust is "simple" or "complex?" When is this determination made?

The Brighton 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 is required to distribute $25,000 to Roger and $50,000 to Sally.After payment of these amounts,the trustee is empowered to make additional distributions at its discretion.Exercising this authority,the Brighton trustee distributes an additional $20,000 to Roger,and $30,000 to Sally.How much income from the trust must Sally recognize?

Generally,an administrative expense should be claimed on the decedent's estate tax return,because it is subject to a higher marginal tax bracket than is the estate's taxable income.

Consider the term fiduciary accounting income as it is used with respect to the Federal income taxation of trusts and estates.How is this amount computed? Where is it used in computing the parties' taxable incomes?

Dexter established a divorce trust to benefit his ex-wife Jena.The accounting income of the trust is distributed to Jena,in satisfaction of the year's alimony obligation.Under Subchapter J rules,____________________,and not the trust,is taxed on the amount of the distribution.