Reference no: EM132748147
Questions -
Q1. Stacey inherits unimproved land (fair market value of $6 million) from her father on June 1, 2017. Stacey makes the following disclaimers, disclaiming her interest in the property as follows: a disclaimer made on December 1, 2017 disclaiming one-third interest; a disclaimer made on January 3, 2018 disclaiming another one-third interest; and a disclaimer made on May 31, 2018 disclaiming the remaining one-third interest. In all cases, the disclaimers pass the interest to her son (the next heir under state law). The Federal gift tax applies to:
a. All of the land.
b. One-third interest.
c. Two-thirds interest.
d. None of the land.
Q2. Which of the following is the annual maximum amount trust beneficiaries pay tax on?
a. Entity taxable income.
b. Entity adjusted gross income.
c. Distributable net income.
d. Fiduciary accounting income.
Q3. The trustee of the Miguel Trust can distribute any amount of accounting income and corpus to the trust's income beneficiaries, Paula and George. This year, the trust incurred the following.
Taxable interest income $40,000
Tax-exempt interest income 20,000
Long-term capital gains-allocable to corpus 10,000
Fiduciary's fees-allocable to corpus 6,000
The trustee distributed $40,000 to Paula.
What is Miguel's trust accounting income?
a. $24,000.
b. $57,000.
c. $60,000.
d. $64,000.
Q4. The Chen Trust is required to distribute its accounting income every year, one-half to Missy Chen, and one-half to the Charlie Chen. What is the Chen Trust's personal exemption?
a. $0
b. $100
c. $300
d. $600
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