Dana Dodson died October 31, 2018, with a gross estate of $16.7 million, debts of $200,000, and a taxable estate of $16.5 million. Dana made no taxable gifts. All of her property passed under her will to her son, Daniel Dodson. "the estate chose a June 30 year-end. Its receipts, disbursements, and gains for the period ended June 30, 2019, were as follows:

Of the $27,000 dividends received in the estate's first tax year, $7,000 were declared October 4, 2018, with a record date of October 25 and a payment date of November 4, 2018. The corporate bonds pay interest each August 31 and February 28. The estate collected S18,000 corporate bond interest in February 2019 and August 2019. The tax- exempt bonds pay interest each June 30 and December 31. The estate collected $4,500 in December 2018 and $4,500 in June 2019 from the tax-exempt bonds. Dana, a cash basis taxpayer, sold land in 2017 for a total gain of $60,000 and used instalhnent reporting. She collected principal in 2017 and reported gain of $40,000 on her 2017 return. The estate collected additional principal in March 2019 and the remaining principal payment in March 2020. The gain attributable to the March 2019 and March 2020 principal col-lections is S10,000 per tax year. Ignore interest on the sale. Calculate the following:?

a. Deductible executor's fee.?

b. Total IRD and the 11(1.) reported on the return for the period ended June 30. 2019.?

c. Total Sec. 691(c) deduction if none of the debts are DRD.?

d. Section 691(c) deduction deductible on the estate's income tax return for the period ended June 30, 2019.?

e. Taxable income of the estate for its tax year ended June 30. 2019.?

f. Marginal income tax rate for the estate for its tax year ended June 30, 2019.

Transcribed Image Text:

Dividend income Interest income from corporate bonds Interest income from tax-exempt bonds Gain on sale of land Executor's fee (charged to principal) Distribution to Daniel Dodson $27,000 18,000 9,000 10,000 4,000 -0-