Estate and Trust Quiz.

1. A died on January 2, 2016, survived by his wife and four qualified dependent children. He left a net estate of 80
million which is in the hands of an executor. In 2016, 2017, 2018, the estate had identical gross receipts of 7
million, cost of sales of 4 million and business expenses of 2,200,000. The net taxable incomes of the estate in
2016, 2017, and 2018 are?

2. A died on January 2, 2018 leaving a net estate of 4,000,000. The estate is in the hands of an executor. B, a
nephew of A, married is one of the heirs of A.

In 2019m the estate had a gross income of 800,000 and expenses of 500,000 on the properties in the estate. B,
has his own gross sales of 600,000, cost of sales of 400,000 and business expenses of 120,000. The executor
distributed to B the following:

From the properties of the estate 250,000

From the current year’s income, net of 15% CWT 85,000

For 2019, both estate of A and B do not avail the 8% income tax rate option

Required:
a. Taxable income of the estate in 2019
b. The taxable income of B in 2019
c. Income tax payable/refund of B in 2019

3. A created two trust, Trust I and Trust 2 with different trustees but withn a common beneficiary. The following
data pertain to the trusts and the beneficiary’s own account:

Trust I Trust 2 Beneficiary

Gross income 450,000 1090,000 250,000

Allowable deductions 75,000 125,000 100,000

Income distributed to beneficiary (gross of CWT) 150,000 175,000

Required: Determine the taxable income of

A. Trust 1
B. Trust 2
C. Consolidated trust
D. Beneficiary

4. In 2017, A created a trust for his daughter, B and appointed C as the trustee. A transferred a 10 door apartment
where rent income of 190,000 per month (net of 5% withholding tax) was received by the trust with cost of
revenues of 400,000 and deductible expenses of 580,000 in each of the taxable years 2017, and 2018. In both
years, 30% of the net income was given to B. Determine the income tax still due from the trust in 2017 and
2018.

5. A, a resident citizen died 2 years ago leaving a net estate of 4 million. His estate is still under administration. In
2018, the net estate, which includes an apartment, realized a total income of 2,280,000 (net of 5% tax). The
executor distributed 200,000 and 300,000 to A’s daughter and son respectively. 75% of the amount distributed
came from the income of the estate while 25% of which is a non-deductible expense. Determine the tax still due
from estate in 2018