HANDOUT PROBLEM FOR SPRING 2011 (modified from prior midterm) The Estate of Tyr Mitchell was formed on 8 August 2009 and duly adopted an initial tax...

The Estate of Tyr Mitchell was formed on 8 August 2009 and duly adopted an initial taxyear ending 31 December 2009. The estate was formed due to the death of Tyr Mitchell.Tyr Mitchell was a California resident, and, under California law, 50% of fiduciary feesare chargeable to “corpus” (also called “principal”) and 50% are chargeable to income forpurposes of determining Aaccounting income@. In California, capital gains are allocated 100% to“corpus”unless the will states differently (which it does NOT in the case of Tyr’s estate – i.e.,Tyr’s estate follows the general California rule for capital gains).The estate’s activity for the initial period from 8 August 2009 through 31 December 2009was as follows:Received dividend income on stocks............................................ $ 200,000Received nontaxable California municipal bond interest income. $ 60,000Received gross rental income on a parking lot.............................. $ 300,000Received sales proceeds of stock sold on 12/26/2009 of................ $ 475,000(The stock was valued at $375,000 in Tyr’s estate& had originally been purchased by Tyron 6 July 1991 for $200,000)Paid property taxes & insurance on the parking lot of.................. ($ 40,000)Paid fiduciary fees of..................................................................... ($ 50,000)Paid distributions to Ted Mitchell, the sole beneficiary, of.......... ($ 120,000)REQUIRED:A. What is the estate’ accounting income for 2009?B. What is the estate’ distributable net income for 2009?C. What is the estate’ taxable income for 2009?D. How much and what type of income allocated from the Estate must be reported byTed Mitchell on his 2009 individual income tax return?E. What is the estate’ federal income tax liability for 2009?also in attachment