Question

Dan dies holding a limited power of appointment over the assets of a trust. On what Schedule is the value of the intrest reported?

A) Schedule E
B) Schedule F
C) Schedule H
D) It is not included in his estate

Answer 1

Schedule E

Step-by-step explanation:

Dan dies holding a limited power of appointment over the assets of a trust. On what Schedule is the value of the interest reported?

A) Schedule E

B) Schedule F

C) Schedule H

D) It is not included in his estate

Power of appointment is a right given in a written instrument allowing an individual to decide to distribute property. ... The holder of the limited power of appointment can transfer property to anyone other than himself/ herself.

Schedule E (Form 1040) is used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts etc.

Schedule F is used to report farm income

Schedule H (Form 1040) is used to report household employment taxes. A household employee paid in wages and the wages were subject to social security, Medicare, or FUTA taxes, or if you withheld federal income tax.

Since there is a profit on the trust which is in the care of Dan , then the interest will be filed under Schedule E