For the First Five Months of Its Existence (August Through

question 35

Essay

For the first five months of its existence (August through December 2008), the Estate of Christine Lowry had gross income (net of expenses)of $7,000 per month. For January through July 2009, the executor estimates that the estate will have gross income (net of expenses)totaling $5,000. The estate's sole beneficiary is Christine's son, Jonathan, who is a calendar-year taxpayer. Jonathan incurred a large NOL from his sole proprietorship years ago, and $34,000 of the NOL carryover remains but expires at the end of 2008. During 2008, Jonathan received only $5,000 of income from part-time employment. What tax issues should the executor of Christine's estate consider with respect to the reporting of the estate's income?

---

Definitions:

Wages Expense

The total cost incurred by an employer for paying the hourly earnings of its employees.

Wages Payable

The total amount of wages earned by employees that the company has not yet paid.

End-Of-Period Spreadsheet

An End-Of-Period Spreadsheet is a document used in accounting to compile balances from journals and ledgers, facilitating adjustments and preparing financial statements.

Chart of Accounts

A list of all the accounts used in a company's accounting system, organized by category, that helps in preparing and reporting financial statements.