a.) If Patrick was on the cash basis of accounting at the date of his death, how much ncome would be included on his final income tax return?
a.) If Patrick was on the cash basis of accounting at the date of his death, how much ncome would be included on his final income tax return?
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 21CE
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Question
Transcribed Image Text:Patrick King dies on January 15, 2021. On the date of his death, Patrick had a bank account
which pays interest on a quarterly basis. On March 31, 2021, $12,000 of interest
income is credited to Patrick's bank account.
(a.) If Patrick was on the cash basis of accounting at the date of his death, how much
income would be included on his final income tax return?
(b.) Would your answer to (a) change if Patrick was on the accrual basis of accounting
at the date of his death?
(c.) If Patrick does not recognize all of the interest income on his final income tax retun
in part (a) or (b), who would recognize the income?
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