Chapter 20: Income Taxation of Trusts and Estates45. The unextended due date for a calendar-year trust to file its Form 1041 is March 15.
46. Tax planning usually dictates that high-income and high-wealth individuals be specified as second-tier beneficiariesof a trust arrangement.
47. When a trust distributes an in-kind asset with a realized loss, most likely this loss cannot be immediately deductedby the first-tier beneficiary.a. Trueb. FalseANSWER:TrueRATIONALE: The loss should be directed to the trust, which almost always is in a higher tax bracket than are the beneficiaries. Further, the related-party rules likely disallow the loss for the beneficiary.
48. The Philmore Estate is subject to a 40% Federal estate tax rate and a 45% Federal and state income tax rate.Generally, an administrative expense should be claimed on the estate’s income tax return.
49. Generally, an administrative expense attributable to municipal bond interest should be claimed on the estate’s Form706.