1. What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction?

Generally accepted accounting principles.

Federal estate laws.

State estate laws.

The Internal Revenue Code.

The decedent's intentions or state laws.

2. Executor's fees and court costs for settling an estate usually

Must be apportioned between the principal and the income of the estate.

Are subtracted from life insurance proceeds.

Are ignored.

Are adjustments to the income of the estate.

Are adjustments to the principal of the estate.

3. During 2016, an estate generated income of $44,000:

Rental income	$	17,000
Interest income		14,000
Dividend income		13,000

The interest income is conveyed immediately to the beneficiary stated in the decedents will. The dividends are given to the decedents church.

What is the taxable income of the estate?

4. When an estate does not have sufficient assets to satisfy all claims against it, what claim has the highest priority?

Back wages owed to any employees.

Medical expenses of the final illness.

Expenses of administering the estate.

Federal income taxes.

State income taxes.