Three Weeks After Abed Died, His Brother Tony Properly Received

question 17

Multiple Choice

Three weeks after Abed died, his brother Tony properly received Abed's last paycheck from his employer. The gross amount of the check was $4,000, and a $300 deduction for state income taxes was subtracted in computing the net amount of the payment. Which of the following statements is true?

• A) The $300 is deductible on neither Tony's income tax return nor on Abed's estate tax return.
• B) The $300 is deductible both on Tony's income tax return and on Abed's estate tax return.
• C) The $300 is deductible only in computing Abed's taxable estate.
• D) The $300 is deductible only on the income tax return of Abed's estate.

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Definitions:

Manufacturer

A type of business or company that produces finished goods from raw materials in large quantities for sale.

Present Value

The present worth of a future amount of money or series of cash flows, considering a certain interest rate.

Future Lease Payments

The amounts due over the lease term for the use of an asset.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.