South-Western Federal Taxation
2025, Comprehensive, 48th Edition
by James C. Young
Complete Chapter Solutions Manual
are included (Ch 1 to 50)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
Chapter 1. An Introduction to Taxation and Understanding the Federal Tax Law.
Chapter 2. Working with the Tax Law.
Chapter 3. Tax Formula and Tax Determination
Chapter 4. Gross Income: Concepts and Inclusions
Chapter 5. Gross Income: Exclusions
Chapter 6. Deductions and Losses: In General
Chapter 7. Deductions and Losses: Certain Business Expenses and Losses
Chapter 8. Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9. Deductions: Employee and Self-Employed-Related Expenses
Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Chapter 12. Tax Credits and Payments
Chapter 13. Property Transactions: Determination of Gain or Loss, Basis Considerations, and
Nontaxable Exchanges
Chapter 14. Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
Chapter 15. The Deduction for Qualified Business Income for Noncorporate Taxpayers
Chapter 16. Accounting Periods and Methods
Chapter 17. Corporations: Introduction and Operating Rules
Chapter 18. Corporations: Organization and Capital Structure
Chapter 19. Corporations: Distributions Not in Complete Liquidation
Chapter 20. Corporations: Distributions in Complete Liquidation and an Overview of
Reorganizations
Chapter 21. Partnerships: Formation, Operation, and Basis
Chapter 22. Partnerships: Distributions, Transfer of Interests, and Terminations
Chapter 23. S Corporations
Chapter 24. Taxes in the Financial Statements
Chapter 25. Exempt Entities
Chapter 26. Multistate Corporate Taxation
Chapter 27. Taxation of International Transactions
Chapter 28. Tax Practice and Ethics
Chapter 29. The Federal Gift and Estate Taxes
Chapter 30. Income Taxation of Trusts and Estates
,Solutions Manual organized in reverse order, with the last chapter
displayed first, to ensure that all chapters are included in this
document. (Complete Chapters included Ch30-1)
Solution and Answer Guide
YOUNG, PERSELLIN, NELLEN, MALONEY, CUCCIA, LASSAR, CRIPE, SWFT COMPREHENSIVE
VOLUME 2025, 9780357988817; CHAPTER 30: INCOME TAXATION OF TRUSTS AND ESTATES
TABLE OF CONTENTS
Discussion Questions ...........................................................................................................1
Computational Exercises ................................................................................................... 4
Problems ............................................................................................................................. 5
Research Problems ............................................................................................................13
Check Figures.................................................................................................................... 14
Solutions To Ethics & Equity Features ..............................................................................15
Solutions To Becker CPA Review Questions ....................................................................15
Tax Return Problems ........................................................................................................ 19
DISCUSSION QUESTIONS
1. (LO 1) Taxpayers create trusts for a variety of reasons. Some trusts are established
primarily for tax purposes, and others are designed to accomplish a specific
financial goal or to provide for the orderly management of assets in case of an
emergency. The most commonly encountered reasons for creating a fiduciary entity
include the following:
• To hold life insurance policies on the decedent as part of an estate plan to
remove such policies from the gross estate.
• To manage assets, reduce probate costs, and ensure the privacy of the
distribution of assets near the end of the grantor’s life.
• To provide funds for an advanced education, accumulating income at a lower
tax rate than the grantor.
• To manage the assets of a divorcing couple in an objective manner.
2. (LO 1) Each of the entities is taxed differently under Federal income tax law.
a. C corporations are separate taxable entities distinct from their shareholders.
See Chapter 17.
b. Partnerships are pass-through entities and never incur Federal income tax
liabilities. See Chapters 21 and 22.
, Solution and Answer Guide: Young, Persellin, Nellen, Maloney, Cuccia, Lassar, Cripe, SWFT Comprehensive Volume
2025, 9780357988817; Chapter 30: Income Taxation of Trusts and Estates
c. S corporations are pass-through entities and incur Federal income tax liabilities
only rarely (e.g., built-in gains tax penalty or for the tax on excessive passive
investment income). See Chapter 23.
d. Trusts and estates are modified pass-through entities and incur Federal
income tax when taxable income is retained by the entity, rather than
distributed from taxable amounts to income beneficiaries.
3. (LO 1)
a. All income is required to be distributed currently to the granddaughter of the
grantor. No corpus distributions are made.
b. All income is required to be distributed currently to State University, a qualifying
charity. No corpus distributions are made.
c. Income can be sprinkled at the discretion of the trustee; or same as part a. or b.,
except that a corpus distribution is made during the year.
4. (LO 2) With respect to a distribution of appreciated property by a fiduciary, no gross
income generally is recognized by the entity. Basis of the asset carries over to the
recipient. DNI and the distribution deduction reflect an amount for the distribution
equal to the lesser of the asset’s basis or its fair market value.
DNI and distribution deduction $80,000
Gross income to Liu –0–
Basis to Yang 80,000
Upon making a § 643(e) election, though, the distribution can become a taxable event
to the entity. The gain is recognized by the fiduciary, and the beneficiary takes a basis
in the asset equal to its fair market value. Both DNI and the distribution deduction
would reflect the asset’s fair market value.
DNI and distribution deduction $100,000
Gross income to Liu 20,000
Basis to Yang 100,000
5. (LO 2) The default application of the deduction for administrative fees is to the estate
tax return. Code § 212 expenses of this sort are deductible on an income tax return
only if a waiver of the estate tax deduction is filed.
Here, the deduction is more valuable on the estate tax return, where the marginal
tax rate is higher. So the fees should be fully assigned to the Form 706.
6 . (LO 2) Cost recovery deductions related to the assets of a fiduciary are assigned
proportionately among the recipients of entity accounting income.
Mona deducts on her Form 1040 depreciation attributable to Sterling of $20,000
[$100,000 × ($500,000 ÷ $2,500,000)]. The beneficiaries’ shares of gross, taxable, and
distributable net income are irrelevant for this purpose.
7. (LO 2) If the charitable gift is determinable in both existence and amount to the
controlling will or trust agreement, the entity is allowed a deduction for the amount
of the gift that is paid from current-year gross income. See § 265 for disallowance
possibilities.
2025, Comprehensive, 48th Edition
by James C. Young
Complete Chapter Solutions Manual
are included (Ch 1 to 50)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
Chapter 1. An Introduction to Taxation and Understanding the Federal Tax Law.
Chapter 2. Working with the Tax Law.
Chapter 3. Tax Formula and Tax Determination
Chapter 4. Gross Income: Concepts and Inclusions
Chapter 5. Gross Income: Exclusions
Chapter 6. Deductions and Losses: In General
Chapter 7. Deductions and Losses: Certain Business Expenses and Losses
Chapter 8. Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9. Deductions: Employee and Self-Employed-Related Expenses
Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Chapter 12. Tax Credits and Payments
Chapter 13. Property Transactions: Determination of Gain or Loss, Basis Considerations, and
Nontaxable Exchanges
Chapter 14. Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
Chapter 15. The Deduction for Qualified Business Income for Noncorporate Taxpayers
Chapter 16. Accounting Periods and Methods
Chapter 17. Corporations: Introduction and Operating Rules
Chapter 18. Corporations: Organization and Capital Structure
Chapter 19. Corporations: Distributions Not in Complete Liquidation
Chapter 20. Corporations: Distributions in Complete Liquidation and an Overview of
Reorganizations
Chapter 21. Partnerships: Formation, Operation, and Basis
Chapter 22. Partnerships: Distributions, Transfer of Interests, and Terminations
Chapter 23. S Corporations
Chapter 24. Taxes in the Financial Statements
Chapter 25. Exempt Entities
Chapter 26. Multistate Corporate Taxation
Chapter 27. Taxation of International Transactions
Chapter 28. Tax Practice and Ethics
Chapter 29. The Federal Gift and Estate Taxes
Chapter 30. Income Taxation of Trusts and Estates
,Solutions Manual organized in reverse order, with the last chapter
displayed first, to ensure that all chapters are included in this
document. (Complete Chapters included Ch30-1)
Solution and Answer Guide
YOUNG, PERSELLIN, NELLEN, MALONEY, CUCCIA, LASSAR, CRIPE, SWFT COMPREHENSIVE
VOLUME 2025, 9780357988817; CHAPTER 30: INCOME TAXATION OF TRUSTS AND ESTATES
TABLE OF CONTENTS
Discussion Questions ...........................................................................................................1
Computational Exercises ................................................................................................... 4
Problems ............................................................................................................................. 5
Research Problems ............................................................................................................13
Check Figures.................................................................................................................... 14
Solutions To Ethics & Equity Features ..............................................................................15
Solutions To Becker CPA Review Questions ....................................................................15
Tax Return Problems ........................................................................................................ 19
DISCUSSION QUESTIONS
1. (LO 1) Taxpayers create trusts for a variety of reasons. Some trusts are established
primarily for tax purposes, and others are designed to accomplish a specific
financial goal or to provide for the orderly management of assets in case of an
emergency. The most commonly encountered reasons for creating a fiduciary entity
include the following:
• To hold life insurance policies on the decedent as part of an estate plan to
remove such policies from the gross estate.
• To manage assets, reduce probate costs, and ensure the privacy of the
distribution of assets near the end of the grantor’s life.
• To provide funds for an advanced education, accumulating income at a lower
tax rate than the grantor.
• To manage the assets of a divorcing couple in an objective manner.
2. (LO 1) Each of the entities is taxed differently under Federal income tax law.
a. C corporations are separate taxable entities distinct from their shareholders.
See Chapter 17.
b. Partnerships are pass-through entities and never incur Federal income tax
liabilities. See Chapters 21 and 22.
, Solution and Answer Guide: Young, Persellin, Nellen, Maloney, Cuccia, Lassar, Cripe, SWFT Comprehensive Volume
2025, 9780357988817; Chapter 30: Income Taxation of Trusts and Estates
c. S corporations are pass-through entities and incur Federal income tax liabilities
only rarely (e.g., built-in gains tax penalty or for the tax on excessive passive
investment income). See Chapter 23.
d. Trusts and estates are modified pass-through entities and incur Federal
income tax when taxable income is retained by the entity, rather than
distributed from taxable amounts to income beneficiaries.
3. (LO 1)
a. All income is required to be distributed currently to the granddaughter of the
grantor. No corpus distributions are made.
b. All income is required to be distributed currently to State University, a qualifying
charity. No corpus distributions are made.
c. Income can be sprinkled at the discretion of the trustee; or same as part a. or b.,
except that a corpus distribution is made during the year.
4. (LO 2) With respect to a distribution of appreciated property by a fiduciary, no gross
income generally is recognized by the entity. Basis of the asset carries over to the
recipient. DNI and the distribution deduction reflect an amount for the distribution
equal to the lesser of the asset’s basis or its fair market value.
DNI and distribution deduction $80,000
Gross income to Liu –0–
Basis to Yang 80,000
Upon making a § 643(e) election, though, the distribution can become a taxable event
to the entity. The gain is recognized by the fiduciary, and the beneficiary takes a basis
in the asset equal to its fair market value. Both DNI and the distribution deduction
would reflect the asset’s fair market value.
DNI and distribution deduction $100,000
Gross income to Liu 20,000
Basis to Yang 100,000
5. (LO 2) The default application of the deduction for administrative fees is to the estate
tax return. Code § 212 expenses of this sort are deductible on an income tax return
only if a waiver of the estate tax deduction is filed.
Here, the deduction is more valuable on the estate tax return, where the marginal
tax rate is higher. So the fees should be fully assigned to the Form 706.
6 . (LO 2) Cost recovery deductions related to the assets of a fiduciary are assigned
proportionately among the recipients of entity accounting income.
Mona deducts on her Form 1040 depreciation attributable to Sterling of $20,000
[$100,000 × ($500,000 ÷ $2,500,000)]. The beneficiaries’ shares of gross, taxable, and
distributable net income are irrelevant for this purpose.
7. (LO 2) If the charitable gift is determinable in both existence and amount to the
controlling will or trust agreement, the entity is allowed a deduction for the amount
of the gift that is paid from current-year gross income. See § 265 for disallowance
possibilities.
