1.Taxpayer has the following questions which require you to explain your answers:
A. He has set up a revocable trust for himself and his wife, and put all his Pepsi stock in the
trust. How is it to be taxed? Explain.

B. He is the executor in the probate estate of his deceased father. Father had the following
income: salary payments before death on April 1, 2018, and one salary payment after death. On
what form(s) are they to go, and when are the filing dates? Explain.

C. Father’s taxable estate was $20 million which was in the revocable trust and his spouse is the
sole beneficiary upon his death in December 1, 2019. Is any estate tax due, and if so, when?
Explain.

D. Father had made a $20,000 gift to son on February 1, 2019. Is any gift tax return due, and if
so, when? Explain.

E. Father also give his granddaughter Pepsi stock worth $10,000 (his cost $5000) on January 1,

1. She sold it on June 1 for $20,000 and wants to know the tax result. Is there any difference
   if she inherited the stock?
2. Fiduciary tax calculation
   Golden Family Trust is not required to pay out any of its income to its two beneficiaries, Au
   Golden and Ima Golden. The trust allocates income and expense according to standard state
   law. Tax year is 2019. The trust does not distribute anything to the beneficiaries. Compute the
   trust taxable income.
   Income
   Bank 3/5/7 Interest $20,000
   Pepsi dividends 5,000
   Net Long term capital gain 10,000
   Expenses
   Fiduciary fees 2,000
   tax preparation fees 500
3. Summarize the following cases:
   A. Estate of Mark S. Gallo, 50 TCM 470 (1985)
   B. Wells Fargo Bank v Comm., 319 F.3d 1222 (11CA,2003)
   C. Christopher Stone v. Comm., 54 TCM 462 (1987)