35.The separate share rule

a.is limited to simple trusts.

b.applies to estates but not trusts.

c.applies to trusts but not estates.

d.applies to estates and trusts.

36.Trust DNI is $10,000. This consists of $3,000 tax exempt interest and $7,000 of taxable interest. The trustee distributes $5,000 to the sole trust beneficiary. The beneficiary's distribution is deemed to consist of

a.zero assuming the trustee elects to have all of the income taxed to the trust.

b.taxable interest of $2,500 and tax exempt interest of $2,500.

c.taxable interest of $3,500 and tax exempt interest of $1,500.

d.taxable interest of $3,500.

37.Mary is the sole beneficiary of a simple trust to whom the trustee is required to distribute all current trust income by the terms of the trust agreement. During the taxable year of the trust it receives $10,000 of DNI(current FAI ). The trustee makes no distributions to Mary notwithstanding the terms of the trust agreement.

a. Mary reports the DNI on her 1040 but has a good claim for refund on the income tax she paid on the DNI.

b.Mary is not taxable on the DNI.

c.Mary is taxable on the DNI.

d.Mary is taxable on $9,700 of the DNI.

38.Mary's will provides in part that she devises the sum of $10,000 each to Tom,Dick and Harry. During the estate's first income tax year the estate has $6,000 of DNI and distributes $10,000 each to Tom Dick and Harry.

a.The personal representative can elect to have the $6,000 of DNI occur in tax year 2 of the estate.

b.The personal representative can elect to have the DNI taxed all to the estate, or all to Tom, Dick and Harry, or partly to the estate and partly to Tom,Dick and Harry.

c.Tom, Dick and Harry will not be income taxed on their distributions.

d.Tom, Dick and Harry will each be taxed on $2,000 of DNI as first tier beneficiaries.

39.Fiduciary Accounting Income (FAI)

a.cannot be accurately determined until the termination of the estate of trust administration.

b.is determined by federal law.

c.rules trump the Subchapter J rules on income taxation.

d.affects the computation of DNI.

40.Bob died on February 20, 2017. His probate estate (Subchapter J estate) includes

a.$10,000 in joint checking with a surviving child.

b.$30,000 IRA naming his widow as beneficiary.

c.$100,000 life insurance policy payable to his widow.

d.declared but unpaid dividends on stock he owns.