Questions from Federal Taxation

Q: List some common examples of principal and income items under the Uniform

List some common examples of principal and income items under the Uniform Act.

Q: Joan died April 17, 2016. Joan’s executor chose March 31

Joan died April 17, 2016. Joan’s executor chose March 31 as the tax year end for the estate. The estate’s only beneficiary, Kathy, reports on a calendar year. The executor of Joan’s estate makes the f...

Q: Dana Dodson died October 31, 2016, with a gross estate

Dana Dodson died October 31, 2016, with a gross estate of $6.7 million, debts of $200,000, and a taxable estate of $6.5 million. Dana made no taxable gifts. All of her property passed under her will t...

Q: Glorietta Trust is an irrevocable discretionary trust funded by Grant Glorietta.

Glorietta Trust is an irrevocable discretionary trust funded by Grant Glorietta. The discretionary income beneficiary for life is Grant’s son, Gordon Glorietta (single). Gordon is a partner in a partn...

Q: Carla plans to create a trust and transfer to it oil and

Carla plans to create a trust and transfer to it oil and gas properties producing royalty income. She will transfer no other properties. The sole income beneficiary of the trust will be Carla’s son, M...

Q: Cate Cole died in 2015, and her will left her entire

Cate Cole died in 2015, and her will left her entire estate in equal shares to her two adult children, Calvin and Corrine. Both children anticipate being in the top income tax bracket for at least ten...

Q: A client believes that obtaining an extension for filing an income tax

A client believes that obtaining an extension for filing an income tax return would give him additional time to pay the tax at no additional cost. Is the client correct?

Q: Briefly explain the rules for determining the interest rate charged on tax

Briefly explain the rules for determining the interest rate charged on tax underpayments. Is this rate the same as that for overpayments? In which months might the rate(s) change?

Q: At what rate is the penalty for underpaying estimated taxes imposed?

At what rate is the penalty for underpaying estimated taxes imposed? How is the penalty amount calculated?

Q: Arthur Rich, a widower, is considering setting up an irrevocable

Arthur Rich, a widower, is considering setting up an irrevocable trust (or trusts) with a bank as trustee for his three minor children. He will fund the trust at $900,000 (or $300,000 each in the case...