Question 1

Silvia has three grandchildren. What is the maximum amount that she can contribute this year to a Section 529 education plan without incurring a gift tax?

Accepted Answer

A)  $14,000 
B)  $42,000 
C)  $70,000 
D)  $225,000 
A)  $14,000 
B)  $42,000 
C)  $70,000 
D)  $225,000

Question 2

Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
-John put $50,000 of his money into a joint bank account with his son

Accepted Answer

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

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

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements does not apply to a revocable trust?

Accepted Answer

A)  The grantor of the trust is taxed on trust income. 
B)  The trust property is included in the grantor's gross estate. 
C)  Revocable trusts are all simple trusts. 
D)  The grantor makes a gift when the trust distributes trust income to a beneficiary. 
A)  The grantor of the trust is taxed on trust income. 
B)  The trust property is included in the grantor's gross estate. 
C)  Revocable trusts are all simple trusts. 
D)  The grantor makes a gift when the trust distributes trust income to a beneficiary.

Question 6

Distributable net income

Accepted Answer

A)  limits the amount of a distribution that is taxable to the beneficiary. 
B)  is only made up of taxable income. 
C)  is the minimum amount that must be distributed by a complex trust. 
D)  is the dividend and interest earned by a trust in a year less expenses. 
A)  limits the amount of a distribution that is taxable to the beneficiary. 
B)  is only made up of taxable income. 
C)  is the minimum amount that must be distributed by a complex trust. 
D)  is the dividend and interest earned by a trust in a year less expenses.

Question 7

What is the benefit of the gift-splitting election?

Accepted Answer

The gift-splitting election allows a hus

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The annual gift tax exclusion

Accepted Answer

A)  cannot increase beyond $15,000 per donor. 
B)  does not apply to a bargain purchase between related persons. 
C)  applies to future interests. 
D)  removes small gifts from taxation. 
A)  cannot increase beyond $15,000 per donor. 
B)  does not apply to a bargain purchase between related persons. 
C)  applies to future interests. 
D)  removes small gifts from taxation.

Question 10

Which of the following transfers is taxable under the gift tax statutes?

Accepted Answer

A)  Mark sold land to an unrelated party for less than its fair market value because he needed cash in a hurry. 
B)  After a friend's death, Sharron wrote a check to the university to pay the college tuition for the friend's son. 
C)  Marilynn wrote checks to the landlord to pay her aunt's rent for ten months when her aunt was unemployed. 
D)  Jose wrote a check to the doctor to pay a friend's medical bill when he had surgery. 
A)  Mark sold land to an unrelated party for less than its fair market value because he needed cash in a hurry. 
B)  After a friend's death, Sharron wrote a check to the university to pay the college tuition for the friend's son. 
C)  Marilynn wrote checks to the landlord to pay her aunt's rent for ten months when her aunt was unemployed. 
D)  Jose wrote a check to the doctor to pay a friend's medical bill when he had surgery.

Question 11

Morrow died on January 15, 2018 leaving the following assets:   What is the value of the estate if the alternative valuation date is elected and the house was sold on March 10 for $605,000 and the stocks were sold on June 30 for $265,000?

Accepted Answer

A)  $1,375,000 
B)  $1,360,000 
C)  $1,350,000 
D)  $1,343,000 
A)  $1,375,000 
B)  $1,360,000 
C)  $1,350,000 
D)  $1,343,000

Question 12

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.

Accepted Answer

A)  $150,000; $150,000 
B)  $276,000; $280,000 
C)  $430,000; $350,000 
D)  $530,,000; $550,000 
A)  $150,000; $150,000 
B)  $276,000; $280,000 
C)  $430,000; $350,000 
D)  $530,,000; $550,000

Question 13

The estate tax

Accepted Answer

A)  applies to the person inheriting property. 
B)  was first imposed in 1932 
C)  facilitates wealth distribution. 
D)  was enacted at the same time as the gift tax. 
A)  applies to the person inheriting property. 
B)  was first imposed in 1932 
C)  facilitates wealth distribution. 
D)  was enacted at the same time as the gift tax.

Question 14

The kiddie tax can only be imposed on

Accepted Answer

A)  the earned income of a child under 18. 
B)  unearned income of a child in excess of $2,100. 
C)  income only from property given to a child 
D)  the unearned income of a child in excess of the standard deduction 
A)  the earned income of a child under 18. 
B)  unearned income of a child in excess of $2,100. 
C)  income only from property given to a child 
D)  the unearned income of a child in excess of the standard deduction

Question 15

Bobbie, age 10, has $6,000 in interest from a trust established by her grandmother. Bobbie has no itemized deductions and no other income. What is the total tax on this income?

Accepted Answer

$6,000 - $1,050 standard deduction = $4,

Question 16

What is the gross estate of a decedent?

Accepted Answer

The gross estate of a decedent

Silvia has three grandchildren. What is the maximum amount that she can contribute this year to a Section 529 education plan without incurring a 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. -John put $50,000 of his money into a joint bank account with his son

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

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

Which of the following statements does not apply to a revocable trust?

Distributable net income

What is the benefit of the gift-splitting election?

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

The annual gift tax exclusion

Which of the following transfers is taxable under the gift tax statutes?

Morrow died on January 15, 2018 leaving the following assets: What is the value of the estate if the alternative valuation date is elected and the house was sold on March 10 for $605,000 and the stocks were sold on June 30 for $265,000?

The estate tax

The kiddie tax can only be imposed on

Bobbie, age 10, has $6,000 in interest from a trust established by her grandmother. Bobbie has no itemized deductions and no other income. What is the total tax on this income?

What is the gross estate of a decedent?

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

Silvia has three grandchildren. What is the maximum amount that she can contribute this year to a Section 529 education plan without incurring a 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. -John put $50,000 of his money into a joint bank account with his son

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

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

Which of the following statements does not apply to a revocable trust?

Distributable net income

What is the benefit of the gift-splitting election?

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

The annual gift tax exclusion

Which of the following transfers is taxable under the gift tax statutes?

Morrow died on January 15, 2018 leaving the following assets: What is the value of the estate if the alternative valuation date is elected and the house was sold on March 10 for $605,000 and the stocks were sold on June 30 for $265,000?

The estate tax

The kiddie tax can only be imposed on

Bobbie, age 10, has $6,000 in interest from a trust established by her grandmother. Bobbie has no itemized deductions and no other income. What is the total tax on this income?

What is the gross estate of a decedent?

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