Marge died on August 24 of 2017. Her estate collected taxable bond interest of $10,000 per month beginning in September. The only beneficiary of Marge's estate is Art, a calendar-year taxpayer. Which of the following statements is correct?

1). If the estate selects November 30 as a year-end and makes no distributions prior to that date, the estate will be taxed on $30,000 less a $600 personal exemption for its first tax year.

2). If the estate selects December 31 as its year-end and distributes nothing to Art in December and $40,000 in January of next year, $40,000 less the $600 personal exemption will be taxed on the estate's first tax return.

3). If the estate selects January 31 of next year at its year-end and distributes $40,000 to Art in December of this year and nothing in January, the $40,000 will be taxed on Art's next year's tax return.

4). All of the above are correct.