Solved by verified expert :2447. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #17
When a trust operates a trade or business, it can claim a deduction for wages
paid to employees.
a.
True
b. False
2448. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #18
Estates and trusts can claim Federal income tax deductions for costs incurred
in maintaining investments in U.S. state and local bonds.
a.
True
b. False
2449. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #19
The Bard Estate incurs a $25,000 fee in disposing of the real property of the
decedent. The deduction is claimed against the Federal estate tax, unless by
election it is claimed on the estate’s income tax return.
a.
True
b. False
2450. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #20
The Bard Estate incurs a $25,000 fee in disposing of the real property of the
decedent. The deduction can be claimed $10,000 against the Federal estate tax,
and $15,000 on the estate’s income tax return.
a.
True
b. False
2451. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #21
Cost recovery deductions are assigned pro rata to the recipients of an estate’s
distributable net income (DNI).
a.
True
b. False
2452. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #22
An estate operates a manufacturing business. It can claim a domestic production
activities deduction (DPAD).
a.
True
b. False
2453. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #23
The Whitmer Trust operates a manufacturing business and distributes the profits
to its income beneficiaries. Whitmer passes through to the income beneficiaries
the data needed to compute their domestic production activities deduction.
a.
True
b. False
2454. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #24
The Whitmer Trust operates a manufacturing business. When Whitmer incurs a net
operating loss, the current-year deduction passes through to the income
beneficiaries.
a.
True
b. False
2455. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #25
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.
a.
True
b. False
2456. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #26
A complex trust can claim a Year 1 deduction for a gift to charity, where the
contribution was made on October 20 of Year 2 out of gross income recognized in
Year 1.
a.
True
b. False
2457. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #27
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.
a.
True
b. False
2458. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #28
A fiduciary’s distribution deduction shifts the tax burden for current-year
income from the entity to the beneficiary.
a.
True
b. False
2459. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #29
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 $30,000.
Harry’s AGI can increase by as much as $40,000.
a.
True
b. False
2460. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #30
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 $40,000.
a.
True
b. False
2461. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #31
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
2462. CHAPTER
20—INCOME TAXATION OF TRUSTS AND ESTATES Question TF #32
One-third of the Hermann Estate’s distributable net income consists of
qualifying dividends. Thus, when income beneficiary Susie receives a $30,000
income distribution from the estate, $10,000 of it qualifies for the 15% tax
rate.
a.
True
b. False
