Question 1

Which of the following is an advantage to making a lifetime transfer of property to a donee?

Accepted Answer

A)  It may receive a basis higher than fair market value for the gift tax. 
B)  It removes property from the taxable estate. 
C)  It receives a step-up in basis to fair market value. 
D)  Appreciation escapes taxation when it is sold at a later date. 
A)  It may receive a basis higher than fair market value for the gift tax. 
B)  It removes property from the taxable estate. 
C)  It receives a step-up in basis to fair market value. 
D)  Appreciation escapes taxation when it is sold at a later date.

Question 2

Who are the principal parties to a trust? Briefly define each.

Accepted Answer

The principal parties to a trust are the

Question 3

Which of the following statements is true regarding the filing of a gift tax return?

Accepted Answer

A)  Spouses using the gift-splitting provision do not have to file a return unless the gifts exceed $30,000. 
B)  A gift tax return must be filed when a gift to a church exceeds the annual exclusion. 
C)  A gift tax return is due within five months of making the gift. 
D)  No gift tax return is required to be filed for gifts between spouses. 
A)  Spouses using the gift-splitting provision do not have to file a return unless the gifts exceed $30,000. 
B)  A gift tax return must be filed when a gift to a church exceeds the annual exclusion. 
C)  A gift tax return is due within five months of making the gift. 
D)  No gift tax return is required to be filed for gifts between spouses.

Question 4

Sarah and Clem are very wealthy and have a program of charitable and family giving. In 2018, they give $20,000 to each of their 4 grandchildren, $30,000 to Clem's brother, stock valued at $40,000 (basis = $20,000) to the Cancer society, and they buy a home valued at $525,000 for Sarah's mother. In addition, Clem puts $500,000 of his stock in the family's business into Sarah's name and sets up a revocable trust for Sarah's sister with $100,000 in bonds. If Clem made $1,900,000 and Sarah $1,300,000 in taxable gifts in 2016, their only prior-year taxable gifts, what are Clem's and Sarah's taxable gifts in 2018 if they elect gift splitting?

Accepted Answer

The answer of Sarah and Clem are very wealthy and...

Question 5

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 6

Probate determines the property included in a decedent's taxable estate.

Accepted Answer

A) True 
 B)False

Question 7

The gift tax

Accepted Answer

A)  can apply to tuition paid directly to a school by an unrelated party. 
B)  is not levied when setting up a revocable trust. 
C)  applies to property transfers between divorcing parties. 
D)  Both (a) and (c). 
A)  can apply to tuition paid directly to a school by an unrelated party. 
B)  is not levied when setting up a revocable trust. 
C)  applies to property transfers between divorcing parties. 
D)  Both (a) and (c).

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

What exclusion removes small gifts from the taxable gift base?

Accepted Answer

The annual gift tax exclusion,

Question 10

The donor of a trust is the same as

Accepted Answer

A)  the beneficiary. 
B)  the trustee. 
C)  the grantor. 
D)  the fiduciary. 
A)  the beneficiary. 
B)  the trustee. 
C)  the grantor. 
D)  the fiduciary.

Question 11

Both gross annual gifts and the gross estate are reduced for

Accepted Answer

A)  charitable gifts. 
B)  gifts to a spouse. 
C)  annual exclusion. 
D)  Both (a) and (b). 
A)  charitable gifts. 
B)  gifts to a spouse. 
C)  annual exclusion. 
D)  Both (a) and (b).

Question 12

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 13

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

Accepted Answer

A)  The tax is assessed on the adjusted basis of the decedent's estate. 
B)  Taxable gifts are integrated with the estate value to determine the estate tax. 
C)  The gift and estate tax rate schedules are the same. 
D)  The unified credit applies to gifts and estates. 
A)  The tax is assessed on the adjusted basis of the decedent's estate. 
B)  Taxable gifts are integrated with the estate value to determine the estate tax. 
C)  The gift and estate tax rate schedules are the same. 
D)  The unified credit applies to gifts and estates.

Question 14

Which of the following gifts is not eligible for the annual exclusion?

Accepted Answer

A)  $20,000 given to a spouse 
B)  The remainder interest in a trust 
C)  $100,000 given to North Carolina State University. 
D)  All are eligible for the annual exclusion. 
A)  $20,000 given to a spouse 
B)  The remainder interest in a trust 
C)  $100,000 given to North Carolina State University. 
D)  All are eligible for the annual exclusion.

Question 15

Rachel owned four assets when she died in 2018.
Asset Date of Death Value Alternate Date Valuation
A $11,160,000 $11,180,000
B 2,200,000 2,390,000
C 3,250,000 3,310,000
D 825,000 700,000
Which value should the executor or personal representative use for valuing the gross estate? Explain.

Accepted Answer

Date of death value: $11,160,000 + $2,20

Question 16

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
-Converting a $500,000 revocable trust into an irrevocable trust

Accepted Answer

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

Question 17

What is the purpose of the kiddie tax? What is different in 2018, as compared to 2017?

Accepted Answer

The kiddie tax discourages persons from

Question 18

Only gift taxes of a present interest in property are eligible for the unified credit.

Accepted Answer

A) True 
 B)False

Question 19

The gift tax and estate taxes were imposed in 1932 and 1916, respectively.

Accepted Answer

A) True 
 B)False

Question 20

A trust that features a demand provision by a beneficiary equal to the annual exclusion is

Accepted Answer

A)  an irrevocable trust. 
B)  a revocable trust. 
C)  a Crummy trust. 
D)  a trust established under the UTMA. 
A)  an irrevocable trust. 
B)  a revocable trust. 
C)  a Crummy trust. 
D)  a trust established under the UTMA.

Which of the following is an advantage to making a lifetime transfer of property to a donee?

Who are the principal parties to a trust? Briefly define each.

Which of the following statements is true regarding the filing of a gift tax return?

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?

Probate determines the property included in a decedent's taxable estate.

The gift tax

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

What exclusion removes small gifts from the taxable gift base?

The donor of a trust is the same as

Both gross annual gifts and the gross estate are reduced for

Which of the following is a taxable gift?

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

Which of the following gifts is not eligible for the annual exclusion?

Rachel owned four assets when she died in 2018. Asset Date of Death Value Alternate Date Valuation A $11,160,000 $11,180,000 B 2,200,000 2,390,000 C 3,250,000 3,310,000 D 825,000 700,000 Which value should the executor or personal representative use for valuing the gross estate? Explain.

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -Converting a $500,000 revocable trust into an irrevocable trust

What is the purpose of the kiddie tax? What is different in 2018, as compared to 2017?

Only gift taxes of a present interest in property are eligible for the unified credit.

The gift tax and estate taxes were imposed in 1932 and 1916, respectively.

A trust that features a demand provision by a beneficiary equal to the annual exclusion is

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

Which of the following is an advantage to making a lifetime transfer of property to a donee?

Who are the principal parties to a trust? Briefly define each.

Which of the following statements is true regarding the filing of a gift tax return?

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?

Probate determines the property included in a decedent's taxable estate.

The gift tax

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

What exclusion removes small gifts from the taxable gift base?

The donor of a trust is the same as

Both gross annual gifts and the gross estate are reduced for

Which of the following is a taxable gift?

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

Which of the following gifts is not eligible for the annual exclusion?

Rachel owned four assets when she died in 2018. Asset Date of Death Value Alternate Date Valuation A $11,160,000 $11,180,000 B 2,200,000 2,390,000 C 3,250,000 3,310,000 D 825,000 700,000 Which value should the executor or personal representative use for valuing the gross estate? Explain.

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -Converting a $500,000 revocable trust into an irrevocable trust

What is the purpose of the kiddie tax? What is different in 2018, as compared to 2017?

Only gift taxes of a present interest in property are eligible for the unified credit.

The gift tax and estate taxes were imposed in 1932 and 1916, respectively.

A trust that features a demand provision by a beneficiary equal to the annual exclusion is

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