...CHAPTER 20--INCOME TAXATION OF TRUSTS AND ESTATESCHAPTER 20--INCOME TAXATION OF TRUSTS AND ESTATES Student: ___________________________________________________________________________ 1. Tax planning motivations usually are secondary to other objectives in deciding whether to create a trust. True False 2. A trust might be used by one running for a political office. True False 3. Like a corporation, the fiduciary reports and pays its own Federal income tax liability. True False 4. An estate’s income beneficiary generally must wait until the entity is terminated by the executor to receive any distribution of income. True False 5. With respect to a trust, the terms creator, donor, and grantor are synonyms. True False 6. Corpus, principal, and assets of the trust are synonyms. True False 7. If provided for in the controlling agreement, a trust might terminate when the income beneficiary reaches age 35. True False 8. The decedent’s estate must terminate within four years of the date of death. True False 9. Trusts can select any fiscal Federal income tax year. True False 10. A complex trust pays tax on the income that it retains and adds to corpus. True False 11. A complex trust automatically is exempt from the Federal AMT. True False 12. The first step in computing an estate’s taxable income is the determination of its gross income for the year. True False 13. Generally, capital...
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...Chapter 20 True/False Indicate whether the statement is true or false. ____ 1. Tax planning motivations usually are secondary to other objectives in deciding whether to create a trust. ____ 2. A trust might be used by the parties to an impending divorce. ____ 3. Like a limited liability company, the fiduciary is a tax-reporting, but not a separate tax-paying entity. ____ 4. An estate’s income beneficiary generally must wait until the entity is terminated by the executor to receive any distribution of income. ____ 5. With respect to a trust, the terms creator, donor, and grantor are synonyms. ____ 6. Corpus, principal, and assets of the trust are synonyms. ____ 7. If provided for in the controlling agreement, a trust might terminate when the income beneficiary graduates with a law degree. ____ 8. The decedent’s estate must terminate within four years of the date of death. ____ 9. Trusts usually are required to use a calendar tax year ____ 10. A complex trust pays tax on the income that it retains and adds to corpus. ____ 11. A complex trust may incur a liability for the AMT. ____ 12. The first step in computing an estate’s taxable income is the determination of its gross income for the year. ____ 13. Generally, capital gains are allocated to fiduciary income, because they relate to investment assets. ____ 14. Gain or loss is recognized by a trust when it distributes a non-cash asset. ____ 15. Income...
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