Tax Research and Planning Practice Questions
Course Introduction
Tax Research and Planning is a course designed to equip students with advanced skills in navigating the complexities of tax law and regulation. Students learn to identify tax issues, utilize authoritative tax research tools, and apply tax regulations to various business and personal scenarios. The curriculum emphasizes interpreting statutory provisions, court decisions, and IRS rulings, as well as developing effective tax planning strategies to minimize liabilities ethically. Through case studies and practical exercises, students gain experience in conducting thorough tax research and creating well-documented recommendations, preparing them for professional roles in accounting, law, and financial planning.
Recommended Textbook
South Western Federal Taxation 2013 Comprehensive Edition by William H. Hoffman
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Chapter 1: An Introduction to Taxation and Understanding
the Federal Tax Law
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Sample Questions
Q1) Two months after the burglary of his personal residence, Eric is audited by the IRS.Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash.Eric is the owner and operator of a cash-and-carry liquor store.Eric wonders why he was audited.Can you help explain?
Answer: Although Eric's audit by the IRS could be the result of sheer chance, this appears unlikely.Press coverage of the burglary, particularly if the items stolen were enumerated, could have put the IRS on notice.Why would anyone keep such a large amount of cash at his personal residence? Also, Eric is in a business where tax evasion is easily accomplished.
Q2) Some states use their state income tax return as a means of collecting unpaid sales and use taxes.
A)True
B)False
Answer: True
Q3) Currently, the Federal income tax is more progressive than it ever has been in the past.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Working With the Tax Law
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Sample
Questions
Q1) Which tax-related website probably gives the best policy-orientation results?
A)taxalmanac.org.
B)irs.gov.
C)taxsites.com.
D)taxanalyst.com.
E)ustaxcourt.gov.
Answer: D
Q2) Three judges will normally hear each U.S.Tax Court case.
A)True
B)False
Answer: False
Q3) A Temporary Regulation under § 173 of the Code would be cited as follows: Temp.Reg.§ 173.
A)True
B)False
Answer: False
Q4) A U.S.District Court is the lowest trial court.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Computing the Tax
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Sample Questions
Q1) Albert buys his mother a TV.For purposes of meeting the support test, Albert cannot include the cost of the TV.
A)True
B)False
Answer: False
Q2) In determining whether the support test is met for dependency exemption purposes, only the taxable portion of a scholarship is considered.
A)True
B)False
Answer: False
Q3) Butch and Minerva are divorced in December of 2012.Since they were married for more than one-half of the year, they are considered asmarried for 2012.
A)True
B)False
Answer: False
Q4) For dependents who have income, special filing requirements apply.
A)True
B)False
Answer: True
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Chapter 4: Gross Income: Concepts and Inclusions
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Q1) Ted earned $150,000 during the current year.He paid Alice, his former wife, $75,000 in alimony.Under these facts, the tax is paid by the person who benefits from the income rather than the person who earned the income.
A)True
B)False
Q2) The alimony recapture rules are intended to:
A)Assist former spouses in collecting alimony when the other spouse moves to another state.
B)Prevent tax deductions for property divisions.
C)Reduce the net cash outflow for the payor.
D)Distinguish child support payments from alimony.
E)None of the above.
Q3) In the case of a below-market loan between family members, if the imputed interest rules apply, which of the following is not true?
A)The borrower must recognize interest income.
B)The lender must recognize interest income.
C)The borrower is deemed to have received a gift.
D)The lender is deemed to have made a gift.
E)None of the above is true.
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Page 6
Chapter 5: Gross Income: Exclusions
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Q1) In December 2012, Todd, a cash basis taxpayer, paid $1,200 of fire insurance premiums for the calendar year 2013 on a building he held for rental income. Todd deducted the $1,200 of insurance premiums on his 2012 tax return.He had $150,000 of taxable income that year. On June 30, 2013, he sold the building and, as a result, received a $500 refund on his fire insurance premiums.As a result of the above:
A)Todd should amend his 2012 return and claim $500 less insurance expense.
B)Todd should include the $500 in 2013 gross income in accordance with the tax benefit rule.
C)Todd should add the $500 to his sales proceeds from the building.
D)Todd should include the $500 in 2013 gross income in accordance with the claim of right doctrine.
E)None of the above.
Q2) If a tax-exempt bond will yield approximately .65 (1 - .35) times the yield on a taxable bond of equal risk, who benefits from the tax exemption: the Federal government, the state and local governments who issue the bonds, or the investors?
Q3) What are the tax problems associated with payments received by a wife from her deceased husband's employer? (Assume the wife renders no services to the employer.)
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Page 7
Chapter 6: Deductions and Losses: in General
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Q1) Bobby operates a drug trafficking business.Because he has an accounting background, he keeps detailed financial records.What expenses can Bobby deduct on his Federal income tax return?
Q2) In determining whether an activity should be classified as a business or as a hobby, the satisfaction of the presumption (i.e., profit in at least 3 out of 5 years) ensures treatment as a business.
A)True B)False
Q3) If an activity involves horses, a profit in at least two of seven consecutive years meets the presumptive rule of § 183.
A)True
B)False
Q4) The only § 212 expenses that are deductions for AGI are those related to rent and royalty income.
A)True B)False
Q5) Are there any exceptions to the rule that personal expenditures cannot be deducted?
Q6) Are all personal expenses disallowed as deductions?
Page 8
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Chapter 7: Deductions and Losses: Certain Business
Expenses and Losses
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Q1) For tax years beginning in 2012, the domestic production activities deduction (DPAD) for a sole proprietor is calculated by multiplying 9% times adjusted gross income.
A)True
B)False
Q2) Last year, Lucy purchased a $100,000 account receivable for $90,000.During the current year, Lucy collected $97,000 on the account.What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected.
A)$0.
B)$2,000 gain.
C)$3,000 loss.
D)$13,000 loss.
E)None of the above.
Q3) Al, who is single, has a gain of $40,000 on the sale of §1244 stock (small business stock) and a loss of $80,000 on the sale of § 1244 stock.As a result, Al has a $40,000 ordinary loss.
A)True
B)False
Q4) Why was the domestic production activities deduction (DPAD) enacted by Congress?
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Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion
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Sample Questions
Q1) Barry purchased a used business asset (seven-year property) on September 30, 2012, at a cost of $200,000.This is the only asset he purchased during the year.Barry did not elect to expense any of the asset under § 179, nor did he elect straight-line cost recovery.Barry sold the asset on July 17, 2013.Determine the cost recovery deduction for 2013.
A)$19,133.
B)$24,490.
C)$34,438.
D)$55,100.
E)None of the above.
Q2) The § 179 limit for a sports utility vehicle with a GVW of 7,000 pounds used for the production of income is $25,000.
A)True
B)False
Q3) All personal property placed in service in 2012 and used in a trade or business qualifies for additional first-year depreciation.
A)True
B)False
Q4) Discuss the reason for the inclusion amount with respect to leased automobiles.
Page 10
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Chapter 9: Deductions: Employee and Self-Employed
Related Expenses
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Q1) A deduction for parking and other traffic violations is allowed under the actual cost method but not the automatic mileage method.
A)True
B)False
Q2) Under the automatic mileage method, one rate does not cover every type of expense.For 2012, what are the rates for business use, education, moving, charitable, and medical?
Q3) The tax law specifically provides that a taxpayer cannot be temporarily away from home for any period of employment that exceeds one year.
A)True
B)False
Q4) During 2012, Eva used her car as follows: 12,000 miles (business), 1,400 miles (commuting), and 4,000 miles (personal).In addition, she spent $440 for tolls (business) and $620 for parking (business).If Eva uses the automatic mileage method, what is the amount of her deduction?
Q5) Once set for a year, when might the IRS change the rate for the automatic mileage method?
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Chapter 10: Deductions and Losses: Certain Itemized
Deductions
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Q1) Herbert is the sole proprietor of a furniture store. He can deduct real property taxes on his store building but he cannot deduct state income taxes related to his net income from the furniture store as a business deduction.
A)True
B)False
Q2) Fees for automobile inspections, automobile titles and registration, bridge and highway tolls, parking meter deposits, and postage are not deductible if incurred for personal reasons, but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer.
A)True
B)False
Q3) Which of the following items would be an itemized deduction on Schedule A of Form 1040 subject to the 2%-of-AGI floor?
A)Professional dues to membership organizations.
B)Work uniforms that cannot be used for normal wear.
C)Job-hunting costs.
D)Hobby losses up to the amount of hobby income.
E)All of the above.
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Chapter 11: Investor Losses
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Q1) During the year, James performs the following personal services in three separate activities: 800 hours as a CPA in his tax practice, 400 hours in a real estate development business (in which he is not a material participant), and 600 hours in an apartment leasing operation.He expects that losses will be realized from the two real estate ventures while his tax practice will show a profit.James files a joint return with his wife whose salary is $200,000.What is the character of the income and losses generated by these activities?
Q2) Pat sells a passive activity for $100,000 that has an adjusted basis of $55,000.During the years of her ownership, $60,000 of losses have been incurred that were suspended under the passive activity loss rules.In addition, the passive activity generated tax credits of $10,000 that were not utilized and suspended.Determine the tax treatment to Pat on the disposition of the property.
Q3) Last year, Wanda gave her daughter a passive activity (adjusted basis of $80,000; fair market value of $160,000) with suspended losses of $20,000. In the current year, her daughter realizes income of $10,000 from the activity.What are the tax effects to Wanda and her daughter?
Q4) When a taxpayer disposes of a passive activity by death, what happens to any unused passive losses?
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Page 13
Chapter 12: Tax Credits and Payments
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Q1) An individual generally may claim a credit for adoption expenses in the year in which the expenses are paid.
A)True
B)False
Q2) Amber is in the process this year of renovating the office building (originally placed in service in 1976) used by her business.Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible.The $11,000 incurred will produce a disabled access credit of what amount?
A)$0.
B)$5,000.
C)$5,125.
D)$5,500.
E)None of the above.
Q3) Discuss the treatment of unused general business credits.
Q4) Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.
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14
Chapter 13: Property Transactions: Determination of Gain or
Loss, Basis Considerations, and Nontaxable
Exchanges-Part 2
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Sample Questions
Q1) How is the donee's basis calculated for the gift of appreciated property for a gift made before 1977? Assume the donor pays gift tax.
Q2) Larry, who lived in Maine, acquired a personal residence eight years ago when he was 42 years old.During this period he has occupied the residence for only nine months (out of 12) each year due to winter vacations in Florida.Is Larry eligible for exclusion of gain under § 121?
Q3) Evelyn's office building is destroyed by fire on July 12, 2012.The adjusted basis is $315,000.She receives insurance proceeds of $350,000 on August 31, 2012.Calculate the amount that Evelyn must reinvest in qualifying property in order that her recognized gain be $20,000.Assume she elects § 1033 (nonrecognition of gain from an involuntary conversion) postponement treatment.
Q4) Monica sells a parcel of land to her son, Elbert, for $90,000.Monica's adjusted basis is $100,000.Three years later, Elbert gives the land to his fiancée, Karen.At that date, the land is worth $104,000.No gift tax is paid.Since Elbert is going to be stationed in the U.S.Army in Germany for 3 years, they do not plan on being married until his tour is completed.Six months after receiving the land, Karen sells it for $110,000.At the same time, Karen sends Elbert a "Dear John" email.Calculate Karen's realized and recognized gain or loss.
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Chapter 13: A: Property Transactions: Determination
of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1
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Q1) Which of the following statements is correct?
A)Under no circumstances does part of the stock basis have to be allocated to nontaxable stock rights.
B)If the fair market value of stock rights is equal to at least 15% of the fair market value of the stock, part of the stock basis must be allocated to nontaxable stock rights.
C)An election may be made to allocate part of the stock basis to nontaxable stock rights only if the fair market value of the nontaxable stock rights is at least 15% of the fair market value of the stock.
D)Only b.and c.are correct.
E)Only a.and c.are correct.
Q2) The basis of boot received in a like-kind exchange is its fair market value, unless the realized gain is a smaller amount.
A)True B)False
Q3) If boot in the form of cash is given in a § 1031 like-kind exchange, the realized gain may be recognized.
A)True B)False
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Chapter 14: Property Transactions: Capital Gains and Losses,
1231, Recapture Provisions
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Q1) Section 1231 property includes nonpersonal use property where casualty losses exceed casualty gains for the taxable year.
A)True
B)False
Q2) Robin Corporation has ordinary income from operations of $30,000, net long-term capital gain of $10,000, and net short-term capital loss of $15,000.What is the taxable income for 2012?
A)$25,000.
B)$27,000.
C)$28,500.
D)$30,000.
E)None of the above.
Q3) Why is it generally better to have a net § 1231 gain year followed by a net § 1231 loss year rather than a net § 1231 loss year followed by a net § 1231 gain year?
Q4) Original issue discount is amortized over the life of the bond.
A)True B)False
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Chapter 15: Alternative Minimum Tax
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Q1) Certain adjustments apply in calculating the corporate AMT that do not apply in calculating the noncorporate AMT and certain adjustments apply in calculating the noncorporate AMT that do not apply in calculating the corporate AMT.
A)True
B)False
Q2) Ashly is able to reduce her regular income tax liability from $47,000 to $43,500 as the result of the alternative tax on net capital gain.Ashly's tentative AMT is $51,000.
A)Ashly's tax liability is reduced by $3,500 as the result of the alternative tax calculation on net capital gain.
B)Ashly's AMT is increased by $3,500 as the result of the alternative tax calculation on net capital gain.
C)Ashly's tax liability is $43,500.
D)Ashly's tax liability is $47,000.
E)None of the above.
Q3) The AMT does not apply to qualifying "small corporations."
A)True
B)False
Q4) Discuss the tax year in which an AMT adjustment is first required for an ISO.
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Chapter 16: Accounting Periods and Methods
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Q1) Charlotte sold her unincorporated business for $600,000 in 2012.The sales contract allocated $120,000 to equipment, $300,000 to land, and $180,000 to goodwill.Charlotte had a $0 basis in the goodwill, the land cost $150,000, and the equipment originally cost $250,000 but it was fully depreciated.What is the amount of the gain eligible for installment sales treatment?
A)$0.
B)$330,000.
C)$450,000.
D)$600,000.
E)None of the above.
Q2) Generally, an advantage to using the cash method of accounting, as compared to the accrual method, is that under the cash method income is not recognized until it is collected, rather than being taxed as soon as the taxpayer has the right to collect the income.
A)True
B)False
Q3) A doctor's incorporated medical practice may end the last day of any month of the year.
A)True
B)False
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Chapter 17: Corporations: Introduction and Operating Rules
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Q1) No dividends received deduction is allowed unless the corporation has held the stock for more than 90 days.
A)True
B)False
Q2) On December 31, 2012, Lavender, Inc., an accrual basis C corporation, accrues a $90,000 bonus to Barry, its vice president and a 70% shareholder.Lavender pays the bonus to Barry, who is a cash basis taxpayer, on March 15, 2013.Lavender can deduct the bonus in 2013, the year in which it is included in Barry's gross income.
A)True
B)False
Q3) Double taxation of corporate income results because dividend distributions are included in a shareholder's gross income but are not deductible by the corporation.
A)True
B)False
Q4) Mallard Corporation, a C corporation that is not a PSC, incorporated in December 2012 and expects to have substantial organizational expenditures. Discuss tax planning strategies that Mallard should consider in order to maximize the deduction for organizational expenditures.
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Chapter 18: Corporations: Organization and Capital Structure
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Q1) A city contributes $500,000 to a corporation as an inducement to locate in the city. Within the next 12 months, the corporation uses the money to purchase property. The corporation has income of $500,000 and must reduce its tax basis in the property by the same amount.
A)True
B)False
Q2) When forming a corporation, a transferor-shareholder may choose to receive some corporate debt along with stock. Identify some of the issues the transferor must consider when deciding whether debt should be a part of the transaction.
Q3) Lucy and Marta form Blue Corporation. Lucy transfers land (basis of $40,000 and fair market value of $180,000) for 50 shares plus $20,000 cash. Marta transfers $160,000 cash for 50 shares in Blue Corporation.
A)Lucy's basis in the Blue Corporation stock is $40,000.
B)Blue Corporation's basis in the land is $40,000.
C)Blue Corporation's basis in the land is $180,000.
D)Lucy recognizes a gain on the transfer of $140,000.
E)None of the above.
Q4) What is the rationale underlying the tax deferral treatment available under § 351?
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Chapter 19: Corporations: Distributions Not in Complete
Liquidation
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Q1) Timothy owns 100% of Forsythia Corporation's stock.Corporate employees and annual salaries include Timothy ($300,000); Richard, Timothy's son ($80,000); Rita, Timothy's daughter ($100,000); and Sandy ($120,000).The operation of Forsythia Corporation is shared about equally between Timothy and Sandy (an unrelated party).Richard and Rita are full-time college students at a university about 150 miles away.Forsythia Corporation has substantial E & P but has not distributed a dividend for the past five years.Discuss problems related to the salary arrangement for Forsythia Corporation.
Q2) Samantha owns stock in Pigeon Corporation (basis of $80,000) as an investment.Pigeon distributes property (fair market value of $300,000; basis of $150,000) to her during the year.Pigeon has current E & P of $20,000 and accumulated E & P of $80,000 and makes no other distributions during the year.What is Samantha's capital gain on the distribution?
A)$0.
B)$80,000.
C)$120,000.
D)$150,000.
E)None of the above.
Q3) When is a redemption to pay death taxes under § 303 most advantageous?
Q4) How does the payment of a property dividend affect E & P?
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Chapter 20: Corporations: Distributions in Complete
Liquidation and an Overview of Reorganizations
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Q1) Pursuant to a complete liquidation, Oriole Corporation distributes to its shareholders land with a basis of $350,000 and a fair market value of $800,000.The land is subject to a liability of $920,000.What is Oriole's recognized gain or loss on the distribution?
A)$0.
B)$120,000 loss.
C)$120,000 gain.
D)$450,000 gain.
E)None of the above.
Q2) There are several different types of corporate reorganizations allowed by the Internal Revenue Code.Provide a brief description of each type.
Q3) In corporate reorganizations, an acquiring corporation using property other than stock as consideration may recognize gains but not losses on the transaction.
A)True
B)False
Q4) The text discusses four different limitations on loss recognition by liquidating corporations. Provide a brief description of each of these loss limitations.
Q5) Discuss the role of letter rulings in corporate reorganizations.
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Chapter 21: Partnerships
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Q1) On January 1 of the current year, Jenna and Rob form an equal partnership.Jenna makes a cash contribution of $80,000 and a property contribution (adjusted basis of $120,000; fair market value of $160,000) in exchange for her interest in the partnership.Rob contributes property (adjusted basis of $190,000; fair market value of $240,000) in exchange for his partnership interest.Which of the following statements is true concerning the income tax results of this partnership formation?
A)Jenna has a $200,000 tax basis for her partnership interest.
B)Rob recognizes a $50,000 gain on his property transfer.
C)Rob has a $240,000 tax basis for his partnership interest.
D)The partnership has a $160,000 adjusted basis in the property contributed by Jenna.
E)None of the statements is true.
Q2) The "outside basis" is defined as a partner's basis in the partnership interest.
A)True
B)False
Q3) A partnership is an association formed by two or more taxpayers (who must be individuals) to carry on a trade or business.
A)True
B)False
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Chapter 22: S: Corporations
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Q1) Only 80% of the shareholders must consent to an S election.
A)True
B)False
Q2) Rents always are considered to be passive investment income in S status. A)True
B)False
Q3) Explain how the domestic production activities deduction is used for an S corporation.
Q4) Where the S corporation rules are silent, partnership rules apply to the S corporation. A)True
B)False
Q5) Tax-exempt income is listed on Schedule ____________________ of Form 1120S.
Q6) It is not beneficial for an S corporation to issue § 1244 stock. A)True B)False
Q7) ____________________ debt in an S corporation year is not treated as a second class of stock and does not disqualify the S election.
Q8) List some of the separately stated items listed on Schedule K of the Form 1120S.
Q9) Outline the requirements that an entity must meet to elect S corporation status. Page 25
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Chapter 23: Exempt Entities
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Q1) Which of the following are exempt organizations?
A)National Football League (NFL).
B)American Bankers Association (ABA).
C)Professional Golfers Association (PGA).
D)Only a.and c.
E)a., b., and c.
Q2) What income and activities are not subject to the feeder organization rules?
Q3) Nice, Inc., a § 501(c)(3) organization, inherited 100% of the stock of Aggressive, Inc., a for-profit entity, at the beginning of the year.Although Nice plans on selling the stock of Aggressive, a buyer has not yet been located.Aggressive's taxable income for the year is $600,000.Aggressive distributed a dividend of $450,000 to Nice at the beginning of December.Determine the tax consequences for the taxable income and the dividend payment to Aggressive, Inc.
Q4) A private foundation is subject to which of the following taxes?
A)Tax on self-dealing.
B)Tax on investments in publicly traded stock.
C)Tax on taxable expenditures that jeopardize charitable purposes.
D)Only a.and c.
E)a., b., and c.
Q5) What are the common characteristics of organizations that receive exempt status?
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Chapter 24: Multistate Corporate Taxation
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Q1) The property factor includes business assets that the taxpayer owns, but also those merely used under a lease agreement.
A)True
B)False
Q2) In international taxation, we discuss income sourcing rules and the permanent establishment doctrine. In multistate taxation, an analogous term might be the "ultimate destination concept." Define this term, and identify at least two of the most important exceptions to the general rule.
Q3) The sale of groceries to an individual probably is exempt from sales/use tax under the _________________________ rule.
Q4) The individual seller of a used auto should collect and remit sales tax to the state.
A)True
B)False
Q5) Under Public Law 86-272, a state is prohibited from taxing a business if the only connection with the state is the _____________________ of orders for sales of tangible personal property that are sent outside the state for approval or rejection and, if approved, are filled and shipped by the business from a point outside of the state.
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Chapter 25: Taxation of International Transactions
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Q1) Jokerz, a CFC of a U.S.parent, generated $80,000 of Subpart F foreign base company services income in its first year of operations. The next year, Jokerz distributes $50,000 cash to the parent, from those service profits. The parent is taxed on $80,000 in the first year and $50,000 in the second year.
A)True
B)False
Q2) USCo, a domestic corporation, reports worldwide taxable income of $500,000, including a $100,000 dividend from ForCo, a wholly-owned foreign corporation.ForCo's undistributed earnings and profits are $1 million and it has paid $200,000 of foreign income taxes attributable to these earnings.What is USCo's deemed paid foreign tax credit related to the dividend received (before consideration of any limitation)?
A)$500,000.
B)$200,000.
C)$100,000.
D)$20,000.
Q3) Discuss the primary purposes of income tax treaties.
Q4) Subpart F income includes portfolio income like dividends and interest.
A)True B)False
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Chapter 26: Tax Practice and Ethics
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Q1) Troy Center Ltd.withheld from its employees' paychecks $200,000 in Federal income and Social Security taxes for the Monday, June 30 payroll.It then spent the $200,000 on equipment upgrades, missing altogether the August 2 due date for the tax remittances.How much does Troy now owe the government in taxes and penalties? Ignore interest accruals, and assume that the Treasury can prove that Troy's redirecting of the tax withholdings was willful.
Q2) Which of the following statements is correct as to the conduct of IRS income tax audits?
A)Office audits are conducted at the office of the IRS.
B)The most common type of Federal income tax audit is the field audit.
C)An office audit typically is used for a business taxpayer.
D)A correspondence audit usually is concluded after a meeting with the taxpayer at the IRS auditor's office.
Q3) Circular 230 allows a tax preparer to:
A)Take a position on a tax return that is contrary to a decision of the U.S.Supreme Court.
B)Operate the "Tax Nerd's Blog" on the Internet.
C)Charge a $5,000 fee to prepare a Form 1040EZ.
D)Avoid signing a tax return that is likely to be audited.
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Chapter 28: Income Taxation of Trusts and Estates
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Q1) Trusts can select any fiscal Federal income tax year.
A)True
B)False
Q2) Identify the parties that are present when an estate is created, and their key duties. Then do the same for a trust.
Q3) There are several business tax credits that the Yeoman Trust has generated for this tax year. Which taxpayer(s), if any, can use these credits in computing a Federal income tax liability? Explain.
Q4) List the three major functions of distributable net income (DNI) as that amount is used under Federal income tax law.
Q5) In computing the Federal taxable income of a trust, a modified ____________________ approach is used. or
Q6) An estate's income beneficiary generally must wait until the entity is terminated by the executor to receive any distribution of income.
A)True
B)False
Q7) Every ____________________ trust is allowed a $300 personal exemption.
Page 31
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