Question 1

What is the benefit(s) of a living trust?

Accepted Answer

A)  Keeps assets in the trust out of the gross estate. 
B)  Keeps assets in the trust out of the probate estate. 
C)  Maintains privacy for the beneficiaries. 
D)  Both (b) and (c). 
A)  Keeps assets in the trust out of the gross estate. 
B)  Keeps assets in the trust out of the probate estate. 
C)  Maintains privacy for the beneficiaries. 
D)  Both (b) and (c).

Question 2

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 do not elect gift splitting.

Accepted Answer

A)  $530,000; $550,000 
B)  $430,000; $350,000 
C)  $265,000; $275,000 
D)  $80,000; $150,000 
A)  $530,000; $550,000 
B)  $430,000; $350,000 
C)  $265,000; $275,000 
D)  $80,000; $150,000

Question 3

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
-$600,000 placed in an irrevocable trust

Accepted Answer

The answer of Indicate by a T if the following...

Question 4

Sam and Judy married last year. Sam is very wealthy and had Judy sign a prenuptial agreement. Judy did not want a family, but Sam promised to put $1,000,000 in a bank account solely in her name if she has a child. Judy agrees and gives birth to a child one-year later. Sam puts the $1,000,000 in Judy's bank account. Is this a taxable gift? Explain.

Accepted Answer

The $1,000,000 is a gift because the agr

Question 5

The executor can elect the alternative valuation date only if both the value of the estate and the estate tax are reduced.

Accepted Answer

A) True 
 B)False

Question 6

The following transfer(s) is excluded from gift taxes:

Accepted Answer

A)  John makes a $15,000 payment to Shands Hospital on behalf of Martha. 
B)  Cal transferred his half of their house to Colleen as part of their divorce settlement. 
C)  Jonathon gave his grandson a Jaguar automobile when he graduated from College. 
D)  Both (a) and (b). 
A)  John makes a $15,000 payment to Shands Hospital on behalf of Martha. 
B)  Cal transferred his half of their house to Colleen as part of their divorce settlement. 
C)  Jonathon gave his grandson a Jaguar automobile when he graduated from College. 
D)  Both (a) and (b).

Question 7

Charles gave his three grandsons $20,000 each, his friend, Joe, $15,000, and his daughter $32,000. His second wife, Marla, gave her three children $52,000 each and $50,000 to her church. What are Charles and Marla's taxable gifts if they elect gift splitting?

Accepted Answer

A)  $68,000 
B)  $90,000 
C)  $145,000 
D)  $193,000 
A)  $68,000 
B)  $90,000 
C)  $145,000 
D)  $193,000

Question 8

Quinn made taxable gifts of $4,500,000 (after annual exclusions) in 2011. In December of the current year, he passed away leaving a taxable estate of $15,000,000. What is the tax on Quinn's estate if the gifts made in 2011 were his only prior taxable gifts?

Accepted Answer

A)  $1,404,000 
B)  $1,428,800 
C)  $2,928,000 
D)  $4,654,200 
A)  $1,404,000 
B)  $1,428,800 
C)  $2,928,000 
D)  $4,654,200

Question 9

Which of the following is a taxable gift?

Accepted Answer

A)  $25,000 given to the Democratic party. 
B)  $24,000 paid to Stanford University by Joel for the tuition for his best friend's son. 
C)  $100,000 given to the Red Cross. 
D)  None are taxable gifts. 
A)  $25,000 given to the Democratic party. 
B)  $24,000 paid to Stanford University by Joel for the tuition for his best friend's son. 
C)  $100,000 given to the Red Cross. 
D)  None are taxable gifts.

Question 10

A taxpayer must not retain any incidents of ownership in a life insurance policy on his or her life to have it excluded from his or her taxable estate.

Accepted Answer

A) True 
 B)False

Question 11

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
-Corky transferred ownership of a $50,000 life insurance policy with a $5,000 cash surrender value to his wife.

Accepted Answer

The answer of Indicate by a T if the following...

Question 12

What is the difference between the estate tax and the estate income tax?

Accepted Answer

The estate tax is a wealth transfer tax

Question 13

A fiduciary tax return is filed by

Accepted Answer

A)  a trustee. 
B)  a grantor. 
C)  an executor. 
D)  Both (a) and (c). 
A)  a trustee. 
B)  a grantor. 
C)  an executor. 
D)  Both (a) and (c).

Question 14

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
-$14,000 paid to the University of Oklahoma for a foster child's tuition

Accepted Answer

The answer of Indicate by a T if the following...

Question 15

When Shipley died, he owned $100,000 in bonds that he left to his church, a $400,000 house held in joint tenancy with right of survivorship with his brother, and a collection of antique automobiles valued at $1,300,000 that he left to his son. What are Shipley's probate estate and his gross estate, respectively?

Accepted Answer

A)  $1,600,000; $1,300,000 
B)  $1,400,000; $1,300,000 
C)  $1,600,000; $1,600,000 
D)  $1,400,000; $1,600,000 
A)  $1,600,000; $1,300,000 
B)  $1,400,000; $1,300,000 
C)  $1,600,000; $1,600,000 
D)  $1,400,000; $1,600,000

Question 16

The federal gift tax is:

Accepted Answer

A)  imposed upon the recipient of gifts 
B)  imposed upon property in the estate of a deceased person 
C)  imposed upon the donor on lifetime gift transfers 
D)  imposed upon the donee only if a gift is not subject to income taxes 
A)  imposed upon the recipient of gifts 
B)  imposed upon property in the estate of a deceased person 
C)  imposed upon the donor on lifetime gift transfers 
D)  imposed upon the donee only if a gift is not subject to income taxes

Question 17

In 2018, Boris put $12,690,000 in an irrevocable trust for his great grandson. What amount of tax will Boris have to pay because of this transfer?

Accepted Answer

This is a generation skipping trust and

Question 18

Giving appreciating property away reduces the potential lifetime transfer tax for an estate.

Accepted Answer

A) True 
 B)False

Question 19

An income tax return for a fiduciary uses the same income tax rate schedule as an individual filing a separate return.

Accepted Answer

A) True 
 B)False

Question 20

Why do we call the gift and estate rate schedule a unified schedule?

Accepted Answer

The unified rate schedule, in spite of m

What is the benefit(s) of a living trust?

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$600,000 placed in an irrevocable trust

The executor can elect the alternative valuation date only if both the value of the estate and the estate tax are reduced.

The following transfer(s) is excluded from gift taxes:

Charles gave his three grandsons $20,000 each, his friend, Joe, $15,000, and his daughter $32,000. His second wife, Marla, gave her three children $52,000 each and $50,000 to her church. What are Charles and Marla's taxable gifts if they elect gift splitting?

Quinn made taxable gifts of $4,500,000 (after annual exclusions) in 2011. In December of the current year, he passed away leaving a taxable estate of $15,000,000. What is the tax on Quinn's estate if the gifts made in 2011 were his only prior taxable gifts?

Which of the following is a taxable gift?

A taxpayer must not retain any incidents of ownership in a life insurance policy on his or her life to have it excluded from his or her taxable estate.

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -Corky transferred ownership of a $50,000 life insurance policy with a $5,000 cash surrender value to his wife.

What is the difference between the estate tax and the estate income tax?

A fiduciary tax return is filed by

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$14,000 paid to the University of Oklahoma for a foster child's tuition

The federal gift tax is:

In 2018, Boris put $12,690,000 in an irrevocable trust for his great grandson. What amount of tax will Boris have to pay because of this transfer?

Giving appreciating property away reduces the potential lifetime transfer tax for an estate.

An income tax return for a fiduciary uses the same income tax rate schedule as an individual filing a separate return.

Why do we call the gift and estate rate schedule a unified schedule?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Filters

Exam 12: Estates, Gifts, and Trusts

What is the benefit(s) of a living trust?

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$600,000 placed in an irrevocable trust

The executor can elect the alternative valuation date only if both the value of the estate and the estate tax are reduced.

The following transfer(s) is excluded from gift taxes:

Charles gave his three grandsons $20,000 each, his friend, Joe, $15,000, and his daughter $32,000. His second wife, Marla, gave her three children $52,000 each and $50,000 to her church. What are Charles and Marla's taxable gifts if they elect gift splitting?

Quinn made taxable gifts of $4,500,000 (after annual exclusions) in 2011. In December of the current year, he passed away leaving a taxable estate of $15,000,000. What is the tax on Quinn's estate if the gifts made in 2011 were his only prior taxable gifts?

Which of the following is a taxable gift?

A taxpayer must not retain any incidents of ownership in a life insurance policy on his or her life to have it excluded from his or her taxable estate.

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -Corky transferred ownership of a $50,000 life insurance policy with a $5,000 cash surrender value to his wife.

What is the difference between the estate tax and the estate income tax?

A fiduciary tax return is filed by

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$14,000 paid to the University of Oklahoma for a foster child's tuition

The federal gift tax is:

In 2018, Boris put $12,690,000 in an irrevocable trust for his great grandson. What amount of tax will Boris have to pay because of this transfer?

Giving appreciating property away reduces the potential lifetime transfer tax for an estate.

An income tax return for a fiduciary uses the same income tax rate schedule as an individual filing a separate return.

Why do we call the gift and estate rate schedule a unified schedule?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Filters