Questions from Federal Taxation

Q: The IRS is disputing a deduction reported on your Year 1 tax

The IRS is disputing a deduction reported on your Year 1 tax return, which you filed on April 12 of Year 2. On April 4 of Year 5, the IRS audit agent asks you to waive the statute of limitations for t...

Q: a. Describe the shortcut approach for verifying that the amount calculated

a. Describe the shortcut approach for verifying that the amount calculated as a simple trust’s taxable income is correct. b. Can a shortcut verification process be applied for trusts and estates that...

Q: When does the NOL of a trust or estate produce tax deductions

When does the NOL of a trust or estate produce tax deductions for the beneficiaries?

Q: The Mary Morgan Trust, a simple trust governed by the Uniform

The Mary Morgan Trust, a simple trust governed by the Uniform Act, sells one capital asset in the current year. The sale results in a loss. a. When will the capital loss produce a tax benefit for the...

Q: Describe the tier system for taxing trust beneficiaries.

Describe the tier system for taxing trust beneficiaries.

Q: Determine the accuracy of the following statement: Under the tier system

Determine the accuracy of the following statement: Under the tier system, beneficiaries who receive mandatory distributions of income are more likely to be taxed on the entire distributions they recei...

Q: a. Describe to a client what income in respect of a

a. Describe to a client what income in respect of a decedent (IRD) is. b. Describe to the client one tax disadvantage and one tax advantage that occur because of the classification of a receipt as IR...

Q: Given the tax rate schedule for trusts, what reasons (tax

Given the tax rate schedule for trusts, what reasons (tax and/or nontax) exist today for creating a trust?

Q: Describe three situations that cause trusts to be subject to the grantor

Describe three situations that cause trusts to be subject to the grantor trust rules.

Q: Can a client escape the grantor trust rules by providing in a

Can a client escape the grantor trust rules by providing in a trust instrument that income is payable to a nephew for 20 years and that the trust assets pass at the end of 20 years to the client’s spo...