The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares of one-half each. For the current tax year, Allwardt reports the following. Ordinary income $100,000 Long-term capital gains, allocable to income 30,000 Legal and accounting fees, allocable to corpus 5,000 The trust instrument allocates the capital gain to income. a.  How much income is each beneficiary entitled to receive? b.  What is the trust's DNI? c.  What is the trust's taxable income/loss? The trust's ______ (taxable income/loss)  is ____ d.  How much gross income is reported by each of the beneficiaries?

Richard placed his portfolio of income-producing stock valued at $200,000 into an irrevocable trust. The trust provides that the trustee is to pay to Richard 7% of the initial value of the trust annually for a period of 12 years. After the 12-year term, the trustee is directed to pay the remaining assets in the trust to Richard's daughter. Which of the following are CORRECT statements regarding the income, gift, or estate tax implications of this trust arrangement? Richard will owe a gift tax based on the present value of the remainder interest given to his daughter. Taxation of the income earned by this trust will be affected by the grantor trust rules. If Richard dies during the 12-year term of the trust, the trust assets will be included in his gross estate. The right that Richard has retained in this trust is considered to be "qualified" for purposes of the Chapter 14 rules. A) II and IV B) I and III C) I, II, III, and IV D) I and IV

Carl made the following transfers during the current year. What are Carl’s taxable gifts for the current year? 1.Transferred $900,000 in cash and securities to a revocable trust, life estate to himself and remainder interest to his three adult children by a former wife. 2.In consideration of their upcoming marriage, gave Maria a $90,000 convertible. 3.Purchased a $100,000 certificate of deposit listing title as “Carl, payable on proof of death to Maria.” 4.Established a joint checking account with his now-wife, Maria, in December of the current year with $30,000 of funds he inherited from his parents. In January of the following year, Maria withdrew $18,000 of the funds. 5.Purchased for $80,000 a paid-up insurance policy on his life (maturity value of $500,000). Carl designated Maria as the beneficiary. 6.Paid $23,400 to a college for his niece Mindy’s tuition and $11,000 for her room and board. Mindy is not Carl’s dependent. 7.Gave his aunt Betty $52,000 for her heart bypass…

The estate of Nancy Hanks reports the following information: What is the taxable estate value? $7,070,000. $7,100,000. $7,180,000. $7,420,000.

Stephen transferred $19,125 to an irrevocable trust for Graham. The trustee has the discretion to distribute income or corpus for Graham's benefit but is required to distribute all assets to Graham (or his estate) not later than Graham's 21st birthday. What is the amount, if any, of the taxable gift? Answer is complete but not entirely correct. Amount of taxable gift $ 4,1250

A simple trust has the following receipts and expenditures for the current year.  The trust instrument is silent with respect to the capital gains, and state law concerning trust accounting income follows the Uniform Act.  Assume the trustee’s fee is charged equally to principal and income.  Corporate bond interest $40,000 Tax-exempt interest 9,000 Long-term capital gain 5,000 Trustee’s fee 2,000 Distribution to beneficiary 48,000   What is the trust’s taxable income? What is the trust’s tax liability?