Income Tax - Eta2 Trusts And Estates

Front 1

When does an estate terminate

Back 1

all assets and income have been distributed and liabilities paid. 1041 estate tax form must be filed each year until that time

Front 2

how big should an estate be before required to file a 706 estate tax required

Back 2

Estate exceeds threshold of $5.25 million

Front 3

What is IRD how is it taxed

Back 3

Taxable income that was earned but not received at the DOD. IRD is not taxed final return of the deceased taxpayer. It is includible in decedant's estate and subject to estate tax. It may ALSO reported On the return of the beneficiary, if received by bene. Bene may take a deduction for estate tax paid on IRD not subject to 2% foor

Front 4

When is 1041 due

Back 4

same as 1040 but only a 5 month extension (form 7004)

Front 5

What is taxable if bene receives a distribution in excess of DNI

Back 5

Only DNI is taxed

Front 6

What is the new investment income tax that applies to estates and trusts

Back 6

for estates and trusts 3.8% of net investment income on lesser of undistributed net investment income or excess of AGI over $11950 Does not apply to exempt trust or to grantor trusts

Front 7

What is the gross estate tax credit for 2013

Back 7

$2,045.800

Front 8

Can a green card spouse have unlimited marital deduction

Back 8

No limited to $143K. Only us citizen entitled

Front 9

If a decedent holds property in a community property state, what happens to value of property at death

Back 9

1/2 step up in estate, but the entire value of the property will receive step up

Front 10

What is GST based on

Back 10

Amount xferred to skip persons

Front 11

at what income level must a 1041 for estates be filed?

Back 11

gross of $600 or more or any taxable income or any beneficiary is a nonresident alien

Front 12

How are trusts taxed

Back 12

Trusts are pass through entities. Beneficiaries pay income tax on their DNI

Front 13

What is a simple trust

Back 13

distributes all of its income currently, makes no distributions from principal or corpus, makes no distributions to charity

Front 14

Is a grantor trust recognized as a separate entity for income tax purposes

Back 14

No

Front 15

What are some examples of nongrantor trusts

Back 15

Irrevocable trusts, charitable trusts, and disability trusts

Front 16

What do you call trusts that transform a tp personal, living or educational expenses into deductible items

Back 16

Abusive trust arrangement

Front 17

When is a trust considered foreign

Back 17

when it is NOT supervised by us court and a us fiduciary does not controls decisions.

Front 18

what form are us tp required to file re foreign trusts

Back 18

520, creation of or xfer to certain foreign trusts AND 3520A, annual return of foreign trust with us beneficiaries AND form 926, return by transferor of property to a foreign estate or trust

Front 19

What is the exemption for simple trusts

Back 19

A trust that distributes all of its income currently is allowed an exemption of $300. All others trusts are allowed an exemption of $100 per year

Front 20

Is IRD included in estate

Back 20

usually not as it is not really known at DOD. The gross estate includes everything the tp owns at DOD

Front 21

What is a strawman?

Back 21

A person whose trust receives another grantor's assets to be passed through the original trust to a second or more trust for the purpose of disguising the true identity or ownership of he trust

Front 22

What tax credits are allowed on an estate tax return

Back 22

Credit for foreign death taxes, credit for pre 1977 gift taxes, and credit for tax on prior transfers

Front 23

How does an estate use net operating loss of decedent

Back 23

An estate or trust may use the net operating loss of the decedent in his final 1040; a estate may carry its net operating loss back two years; and if a farming loss, carry back 5 years

Front 24

What trusts are included in the surviving spouse or survivors estate

Back 24

grantor trusts and terminal interest trusts, qtip. A trust or marital trust which allows a terminable interest to be left to a surviving spouse and for the property to still qualify for the unlimited marital deduction in the deceased spouse estate. SS is given a general power of appt. The first spouse to die does not have power of control over the trust property. No election must be made by the decedent's executor to qualify the property for the marital deduction. The asset of the A trust must be in the SS gross estate to the extent that they are not consumed during the SS lifetime.

Front 25

A gift of property directly to an individual may be subject to the generation skipping transfer tax even if it is not subject to the gift tax. True or false

Back 25

False. probably because of the exemption s

Front 26

If ird of a cash basis decedent has not been received by the settlement date of the decedent's estate, the ird should be included in which tax return.

Back 26

the estate tax return 1041

Front 27

An estate did not owe taxes in years in year 1 and it expects withholding and credits to be less than 90 percent of the tax reportable at year end. The estate must pay estimated taxes if expects to owe at least what amount

Back 27

$1,000

Front 28

An estate did not owe taxes in years in year 1 and it expects withholding and credits to be less than 90 percent of the tax reportable at year end. The estate must pay estimated taxes if expects to owe at least what amount

Back 28

$1,000

Front 29

If a complex trust states that a certain amount of money is distributed each year and the trust makes more then this designated amount, how should the distribution amount be calculated

Back 29

income must be distributed according to the complex trust document w/o adj

Front 30

What is the penalty for failure to file a Schedule K-1 for the form 1041

Back 30

$50 for each failure

Front 31

A taxable gift to an unrelated individuals who is 40 years younger than the donor is subject to both gift taxes and the generation skipping transfer tax. True or false

Back 31

True

Front 32

What is a skip person

Back 32

A skip person is a person who belongs to a generation that you two or more generations below the generation of the donor

Front 33

A trust maybe a simple trust one year and a complex trust in another year. For example is a simple trust fails to distribute all of its income in the current year how is it classified

Back 33

Complex trust

Front 34

Dividend checks received by a decedent but cashed after death is considered income in respect of a decedent. True or False

Back 34

False. due to constructive receipt

Front 35

Regarding gift splitting what are the marriage requirements

Back 35

The couple must have been married at the time the gift was given and the spouse who gave the gift may not be remarried during the year

Front 36

How are administrative expenses costs treated on form 1041

Back 36

To prevent a double deduction administrative expenses otherwise allowable in figuring the decedent taxable estate on form 706 will not be allowed on form 1041 unless the personal representative files a statement in duplicate that the items of expense have not been claimed as deductions on form 706 and all rights to claim such deductions are waived

Front 37

Capital gains are not automatically included in distributable net income. However it can be included in distributable net income under what circumstances. give at least two

Back 37

The gain is allocated to income in the account of estate or by notice to the beneficiaries under the terms of the will. The gain is allocated to the corpus of the estate and is actually distributed to the beneficiaries during the tax year. The gain is used, under either terms of the will or the practice of the representative, to determine the amount that is distributed. Charitable contributions are made out of capital gain

Front 38

When must the income tax liability for an estate be paid

Back 38

When the return is filed

Front 39

How Is the income distribution deduction calculated on schedule B form 1041. What is limit of the deduction.

Back 39

The income distribution deduction is calculated on schedule B Form 1041 and is limited to the lesser of distributions less tax exempt income or dni less tax exempt income

Front 40

What Is the exemption for a an Estate. What is it for a complex trust and a simple trust

Back 40

Yes the exemption for a trust is $300 for a simple trust and $100 for a complex trust. Whereas at the exemption for an estate is $600

Front 41

What in relation to gifts are included in the gross Estate

Back 41

Gift tax on gifts made during the three year period Before the decedent's death are included in gross estate