1. The decedent’s will states in part “I give, devise and bequeath the sum of $20,000 to Joe”. The decedent’s personal representative writes Joe a check from the estate for $20,000 and in that tax year the estate has $40,000 DNI. Joe will be income taxable on
c. $20,000 if a first tier beneficiary , zero if a second tier beneficiary.
d. $-0- if the personal representative makes the section 645 election.
2. Tom, Dick and Harry are the 3 equal residuary beneficiaries of Jill’s estate. Jill’s personal representative makes a partial estate distribution to each of 100 shares of XYZ Corporation and each 100 share distribution has a basis to the estate of $5,000 and a fair market value on date of distribution of $8,000. Estate DNI in the year of distribution is $20,000. The total DNI that these distributions will carry out for income taxation to the beneficiaries and that will be deductible by the personal representative is