False The tax return would be due on the regular due date if the decedent had

False the tax return would be due on the regular due

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False. The tax return would be due on the regular due date if the decedent had continued to live for the 1. entire year. 2. 4. False. Income in respect of the decedent will be included on the income tax return of the estate or 5. beneficiary who is entitled to the payment and actually receives it. 6. income tax return. 7. 11. False. If one or more beneficiaries of a trust are nonresident aliens or if the trust has taxable income, an 12. income tax return must be filed even if gross income is below $600. 13. True. 16. True. 17. True. 18. False. An estate can have a fi scal year end, therefore, March 6 th is only applicable to trusts. 19. True. Only NOLs, capital losses, and excess deductions can fl ow out. 20. False. The return is due on his normal due date (April 15). 21. True. 22. True. It will have a tax year of four months because all trusts are on a calendar year end. 23. False. An estate can have any fi scal year end that it desires. 24. False. Two tier system. 25.
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719 Testbank © 2010 CCH. All Rights Reserved. Chapter 18 ANSWERS TO MULTIPLE CHOICE QUESTIONS—CHAPTER 18 c. Business losses or capital losses incurred by a decedent prior to death end with the decedent’s final 26. return. a. All valid tax deductions paid by a cash basis decedent before death can be deducted on the decedent’s 27. final return. b. A fiduciary of an estate named in the decedent’s will is called an executor. 28. c. An estate must fi le an income tax return if it has $600 or more of gross income. 29. d. Charitable contributions are not limited on an estate’s income tax return. 30. b. A trust created by a grantor during lifetime is called an inter vivos trust. 31. b. A simple trust is entitled to a personal exemption of $300. 32. d. Charitable contributions cannot be made by a simple trust. 33. d. Throwback rules repealed for domestic trusts. 34. b. Income distributions are recognized by bene fi ciaries on their tax returns for the year in which the estate’s 35. tax year ends. d. Estates are allowed an unlimited charitable contributions deduction. 36. b. The income distribution system has two tiers. 37. b. Since the bene fi ciary was second tier, only $10,000 remained to be taxed on ($20,000 DNI - 1st tier 38. $10,000). c. Since the wife was both fi rst and second tier, she received $10,000 fi rst tier and then split equally the 39. remaining DNI ($10,000) as a second-tier bene fi ciary, thereby receiving $5,000. a. A trust can deduct only $3,000 against its taxable income, with an inde fi nite carryover of $97,000. 40. c. An individual can deduct only $3,000 against taxable income, with an inde fi nite carryover of $97,000. 41. d. The grantor is taxed on the capital gains accumulation. 42. b. Capital gains are normally allocated to corpus.
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