Exam 12: Estates, Gifts, and Trusts

The following gifts could be subject to the generation skipping transfer tax except:

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?

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.

What is the alternative valuation date? What limit is placed on its use?

Carey is trustee of the Floyd Family Trust. The trust distributes $20,000 income to George, $10,000 to Linda, and $5,000 to George and Linda's church. The Floyd Family trust is:

Which of the following applies to a simple trust?

Jessica is doing her year-end tax planning and is concerned about gift taxes. If she comes to you for advice, which of the following would you tell her is a taxable gift?

The alternate valuation date is:

Bill set up two trusts in 2017. The first was for his son, John, to which he contributed $200,000 during that year. (The income interest was valued at $100,000 and the remainder interest's value was $100,000.) Bill plans to continue contributing money to the trust each year but John can withdraw only the lesser of $15,000 or the amount transferred to the trust each year. The trustee can pay the amount annually until John receives the trust assets at age 40. The second trust was for his 10-year old son, Tim. Bill contributed $50,000 in 2018. (The income interest was equal to $10,000 and the remainder interest was equal to $40,000.) The trustee may distribute the income or principal to Tim until he reaches age 21, at which time the assets will be transferred to Tim. In 2018, Bill contributes $10,000 to John's trust and $16,000 to Tim's trust. What types of trusts are these and what are Bill's gift tax consequences in 2017 and 2018?

Sybil gave her son Todd 1,000 shares of XYZ stock on January 16, 2018. The stock's high and low selling prices that day were $55 and $53. Sybil had purchased the stock in 2015 for $70 per share. At the end of 2018, Todd sold the shares for $62,000. Provide the details of both income and gift tax effects for these events.

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?

William set up a trust for his parents. Each parent is to receive one-half of the income for his or her lifetime; when one parent dies, all income is to go to the surviving parent. When the other parent dies, the remainder is to go to William. This trust is

The widow of a decedent may add the decedent's remaining lifetime exclusion to her lifetime exclusion only if the estate executor makes an irrevocable election.

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.

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

A fiduciary tax return is filed by

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

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

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$20,000 transferred into Crummy trust with gift splitting elected.

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift. -$60,000 value of a remainder interest in a trust created this year