Minnie Matthews, a widow and resident of Georgia, died on June 1, 2021. In the decedent's safe deposit box, the executor
Posted: Wed May 04, 2022 4:34 pm
Minnie Matthews, a widow and resident of Georgia, died on June
1, 2021. In the decedent's safe deposit box, the executors of the
estate found these items:
1. Securities valued at $30,000 on the date of death. These were
registered in her name and her son's name as joint owners.
2. Reality titles to a residence in Ohio valued at $6,500,000
and to a condominium in California valued at $4,000,000. These were
bequeathed to her daughter under the will.
3. Deed of transfer to a 1955 irrevocable trust of $279,250 to
pay the income and principal to her children but reserving to
herself power to alter or change the beneficiaries or their
proportionate interests, except that she could not name herself or
her estate as beneficiary.
4. A 1978 issued deposit passbook showing $35,000 in a bank
savings account in the joint names of Carol and her father. The
deposit agreement specifically stated that upon the death of either
Carol or her father, the survivor was entitled to the full amount
of the deposit.
5. A 2017 deed of gift (12/23/17) transferring $1,063,000 to an
irrevocable trust to help her sister have independent income. All
of the trust income must be distributed to the sister. Because of
the gift tax exclusion and the exemption, only $20,500 gift tax was
paid on the gift.
6. Closely held stock in Peachtree Enterprises worth $150,000 on
date of death, but it was only worth $90,000 on September 1,
2020.
7. Minnie also left the following additional property to be
distributed under her will:
During the estate administration, the executors incurred the
following:
The executors also paid the following specific bequests:
Under Georgia law, the executors paid $70,000.
Using the above date of death values, compute the total gross
estate.
Patrick King dies on January 15, 2021. On the date of his death,
Patrick had a bank account which pays interest on a quarterly
basis. On March 31, 2021, $12,000 of interest income is credited to
Patrick's bank account.
(a.) If Patrick was on the cash basis of accounting at the date
of his death, how much income would be included on his final income
tax return?
(b.) Would your answer to (a) change if Patrick was on the
accrual basis of accounting at the date of his death?
(c.) If Patrick does not recognize all of the interest income on
his final income tax return in part (a) or (b), who would recognize
the income?
A simple trust has ordinary gross income of $25,000 and $12,000
of capital gains, which are allocable to corpus. Its only
deductible item is a trustee's commission of $4,000, allocable to
corpus under the trust instrument.
a. How much is the trust's
accounting income?
b. How much is the DNI that will
be taxable to the beneficiary?
c. How much will the trust pay tax
on?
1, 2021. In the decedent's safe deposit box, the executors of the
estate found these items:
1. Securities valued at $30,000 on the date of death. These were
registered in her name and her son's name as joint owners.
2. Reality titles to a residence in Ohio valued at $6,500,000
and to a condominium in California valued at $4,000,000. These were
bequeathed to her daughter under the will.
3. Deed of transfer to a 1955 irrevocable trust of $279,250 to
pay the income and principal to her children but reserving to
herself power to alter or change the beneficiaries or their
proportionate interests, except that she could not name herself or
her estate as beneficiary.
4. A 1978 issued deposit passbook showing $35,000 in a bank
savings account in the joint names of Carol and her father. The
deposit agreement specifically stated that upon the death of either
Carol or her father, the survivor was entitled to the full amount
of the deposit.
5. A 2017 deed of gift (12/23/17) transferring $1,063,000 to an
irrevocable trust to help her sister have independent income. All
of the trust income must be distributed to the sister. Because of
the gift tax exclusion and the exemption, only $20,500 gift tax was
paid on the gift.
6. Closely held stock in Peachtree Enterprises worth $150,000 on
date of death, but it was only worth $90,000 on September 1,
2020.
7. Minnie also left the following additional property to be
distributed under her will:
During the estate administration, the executors incurred the
following:
The executors also paid the following specific bequests:
Under Georgia law, the executors paid $70,000.
Using the above date of death values, compute the total gross
estate.
Patrick King dies on January 15, 2021. On the date of his death,
Patrick had a bank account which pays interest on a quarterly
basis. On March 31, 2021, $12,000 of interest income is credited to
Patrick's bank account.
(a.) If Patrick was on the cash basis of accounting at the date
of his death, how much income would be included on his final income
tax return?
(b.) Would your answer to (a) change if Patrick was on the
accrual basis of accounting at the date of his death?
(c.) If Patrick does not recognize all of the interest income on
his final income tax return in part (a) or (b), who would recognize
the income?
A simple trust has ordinary gross income of $25,000 and $12,000
of capital gains, which are allocable to corpus. Its only
deductible item is a trustee's commission of $4,000, allocable to
corpus under the trust instrument.
a. How much is the trust's
accounting income?
b. How much is the DNI that will
be taxable to the beneficiary?
c. How much will the trust pay tax
on?