TRUE-FALSE QUESTIONS CHAPTER 23
1. The decedent’s final income tax return is due four months after the date of death.
2. A joint income tax return which includes a decedent may not be filed if the surviving spouse has remarried before the end of the tax year in which the decedent dies.
3. The decedent’s medical expenses paid by the estate can be treated as paid at the time they are incurred and deducted on the decedent’s final income tax return as long as they are paid within two years of the decedent’s death.
4. A decedent is allowed a full personal exemption on a final income tax return regardless of date of death.
5. Income in respect of the decedent can only be included on the decedent’s final income tax return.
6. All estates must file an estate income tax return regardless of gross income.
7. The estate’s first income tax return must cover a period of 12 months.
8. An estate is entitled to the standard deduction.
9. Income distributed to beneficiaries by an estate will retain the same character on the beneficiaries’ income tax returns as it had on the estate’s income tax return.
10. In determining what is income to a trust, federal laws always take precedence over laws of the state in which the trust is created.
MULTIPLE CHOICE QUESTIONS CHAPTER 23
11. Business losses or capital losses incurred by a decedent prior to death:
a. Can be carried over to an estate’s income tax return.
b. Can be deducted by estate beneficiaries on their income tax returns.
c. End with the decedent’s final income tax return.
d. Are not deductible on a decedent’s final income tax return.
12. All valid tax deductions paid by a cash basis decedent before death:
a. Can be deducted on the decedent’s final income tax return.
b. Cannot be deducted on the decedent’s final income tax return
c. Can be deducted by the decedent’s estate on its income tax return.
d. Can be deducted by beneficiaries of the decedent’s estate.
13. If named in a decedent’s will, a fiduciary of an estate would be called an:
a. Administrator
b. Executor
c. Trustee
d. Advisor
14. Each estate must file an estate income tax return if the estate has the following income:
a. $100
b. $300
c. $600
d. $1,000
15. Charitable contributions can be deducted on an estate’s income tax return but are limited to the following percentage of gross income:
a. 30 percent
b. 50 percent
c. 80 percent
d. No percentage limitation
16. A trust created by a grantor during his own lifetime is called a:
a. Grantor trust
b. Inter vivos trust
c. Testamentary trust
d. Simple trust
17. A simple trust is entitled to a personal exemption of:
a. $100
b. $300
c. $600
d. $1,000
18. Charitable contributions cannot be made by a(n):
a. Testamentary trust
b. Inter vivos trust
c. Complex trust
d. Simple trust
19. Trust throwback rules apply to:
a. Grantor trusts
b. Multiple trusts
c. Accumulation distributions
d. None of the above.
20. Income distributions from an estate to estate beneficiaries are recognized as income by beneficiaries on their tax returns for the year in which the:
a. Distribution is received.
b. Estate’s tax year ends.
c. Income distribution was earned by the estate.
d. Income distribution was received by the estate.
21. Charitable contributions can be deducted on an estate’s income tax return up to whatpercentage of income?
a. 20 percent
b. 30 percent
c. 50 percent
d. Unlimited percentage of income