Exam 12: Estates, Gifts, and Trusts

In 2018, Bill and his wife, Helen, made the following gifts: Bill's gifts: $50,000 to each of his five children; $30,000 to each of his six grandchildren; $100,000 to Central Hospital for his nephew's hospital bill. Helen's gifts: $100,000 to each of her two children; $50,000 to each of her three grandchildren; $200,000 a state senator's reelection campaign. What are Bill's and Helen's respective taxable gifts (before their unified credit) if they elect gift splitting.

George made a gift of stock valued at $450,000 (basis = $300,000) to his daughter Sally and was required to pay a gift tax of $30,000 on this gift. Which of the following is true regarding this gift?

With a revocable trust, the grantor can change the terms of a trust at will.

The unified credit for 2018 gifts is equivalent to an exemption amount of:

Appreciated property that was inherited in 2018

Which of the following would not be income in respect of a decedent who dies on January 4?

Both gross annual gifts and the gross estate are reduced for

When comparing lifetime transfers to testamentary transfers, which of the following would be preferable as a testamentary transfer?

Glenda, age 8, has $6,150 interest from a trust fund established by her grandfather several years ago. How much of Glenda's income is taxed at the trust and estate's tax rate?

How does the probate estate differ from the gross estate?

The amount of the kiddie tax is the sum of

Which of the following does not apply to the estate tax in effect in 2018?

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$100,000 diamond ring given to a fiancé

The gift tax

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -Transfer of a house valued at $500,000 held in joint tenancy to the wife according to the divorce decree

Gifts are valued at their fair market value on the date of the gift and the donee takes this fair market value as basis.

What is an income beneficiary?

Distributable net income

John made $3,400,000 in taxable gifts prior to his death at the beginning of 2018. His wife, Lola, is the executor of John's estate, and made taxable gifts of $800,000 prior to 2018. What is the maximum amount of taxable lifetime gifts that Lola can make in 2018 before she will have to begin paying a gift tax?

Glenda, age 8, has $6,150 interest from a trust fund established by her grandfather several years ago. What is Glenda's tax liability?