Question 1

A terminable interest is one that ceases upon the passage of time or the occurrence of some event.

Accepted Answer

A) True 
 B)False

Question 2

Karen died on May 5 of the current year. Her executor elects date- of- death valuation. Karen's gross estate possib includes the following items:
• Joint checking account (with her husband), which has a balance of $10,000. Her husband did not contribute t account.
• Joint savings account (with her daughter), which has a balance of $50,000. Her daughter did not contribute t account.
• Life insurance policy on the life of Karen, having a face value of $400,000. The cost of a comparable policy immediately before Karen's death is $150,000. Karen's estate is the beneficiary.
• Life insurance policy on the life of Karen's daughter, having a face value of $100,000 with an interpolated ter reserve immediately before Karen's death of $30,000.
Unexpired premiums are $5,000. Karen is the beneficiary. How much, if any, of these items are included in Kare estate?

Accepted Answer

$490,000 = $5,000 (one- half of joint ch

Question 3

Ernie died this year. His will creates a $2,000,000 QTIP trust for his widow. Ernie's executor elects to claim the marital deduction for the QTIP transfer. At the time of the surviving spouse's death, the value of the QTIP trust is $3.6 million. The amount of the QTIP trust included in the surviving spouse's gross estate is

Accepted Answer

A)  $2,000,000. 
B)  $1,800,000. 
C)  $3,600,000. 
D)  $0. 
A)  $2,000,000. 
B)  $1,800,000. 
C)  $3,600,000. 
D)  $0.

Question 4

Explain why living trusts are popular tax- planning vehicles.

Accepted Answer

Revocable trusts, sometimes called livin

Question 5

Which of the following is deductible in arriving at the amount of the taxable estate?

Accepted Answer

A)  expenses incurred in administering the estate 
B)  charitable contributions 
C)  casualty losses that occurred while administering the estate 
D)  All of the above are deductible. 
A)  expenses incurred in administering the estate 
B)  charitable contributions 
C)  casualty losses that occurred while administering the estate 
D)  All of the above are deductible.

Question 6

Identify which of the following statements is false.

Accepted Answer

A)  When persons other than spouses own property jointly, the amount included in the joint owner's gross estate is measured in accordance with the consideration the decedent furnished to purchase the property. 
B)  If an annuity ceases payments with the death of the decedent and nothing is to be received by any other party, the annuity is included in the gross estate. 
C)  Annuities not related to employment are valued in the gross estate at the cost of a comparable contract multiplied by a fraction that represents the portion of the purchase price that the decedent has contributed. 
D)  Statements A and C are true. 
A)  When persons other than spouses own property jointly, the amount included in the joint owner's gross estate is measured in accordance with the consideration the decedent furnished to purchase the property. 
B)  If an annuity ceases payments with the death of the decedent and nothing is to be received by any other party, the annuity is included in the gross estate. 
C)  Annuities not related to employment are valued in the gross estate at the cost of a comparable contract multiplied by a fraction that represents the portion of the purchase price that the decedent has contributed. 
D)  Statements A and C are true.

Question 7

Which of the following is not a credit for purposes of computing the federal estate tax liability?

Accepted Answer

A)  a credit for foreign death taxes 
B)  credit for gift tax paid on pre- 1977 gifts 
C)  credit for estate taxes paid on certain prior transfers 
D)  All of the above are credits for the federal estate tax. 
A)  a credit for foreign death taxes 
B)  credit for gift tax paid on pre- 1977 gifts 
C)  credit for estate taxes paid on certain prior transfers 
D)  All of the above are credits for the federal estate tax.

Question 8

Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies,

Accepted Answer

A)  none of the stock will be included in Martin's estate. 
B)  the stock's value at the time of transfer to the trust will be included in Martin's estate. 
C)  the value of the stock at death will be included in Martin's estate. 
D)  the value of the stock less the present value of the income receivable by Martin will be included in Martin's estate. 
A)  none of the stock will be included in Martin's estate. 
B)  the stock's value at the time of transfer to the trust will be included in Martin's estate. 
C)  the value of the stock at death will be included in Martin's estate. 
D)  the value of the stock less the present value of the income receivable by Martin will be included in Martin's estate.

Question 9

Mary Johnson dies early in the current year. All her property passes subject to her will, which states that all of her property is to go to a QTIP trust for Dan for life with the remainder to their children. Mary's gross estate is about $11 million, and her Sec. 2053 deductions are very small. Dan, who is in poor health, already owns about
$6 million of property. What tax issues should Dan Johnson and the estate's executor consider with respect to the property that passes to the QTIP trust?

Accepted Answer

• The issue is what marital deduction (i

Question 10

Identify which of the following statements is true.

Accepted Answer

A)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15- year period if elected. 
B)  The period for payment of estate taxes may be extended if the executor shows "reasonable cause" for not being able to pay some, or all, of the estate tax liability on the regular due date. 
C)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until eight months after the interests of the other person(s) terminate. 
D)  All of the above are false. 
A)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15- year period if elected. 
B)  The period for payment of estate taxes may be extended if the executor shows "reasonable cause" for not being able to pay some, or all, of the estate tax liability on the regular due date. 
C)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until eight months after the interests of the other person(s) terminate. 
D)  All of the above are false.

Question 11

Michael Moriarty, a widower, is quite elderly and is beginning to do some estate planning. His goal is to reduce his transfer taxes. He is considering purchasing land with a high potential for appreciation and owning it with his grandson as joint tenants with rights of survivorship. Michael would provide all of the consideration, estimated to be about 11.5 million. What tax issues should Michael Moriarty consider with respect to the purchase of the land?

Accepted Answer

• Does Michael make a gift when he purch

Question 12

Identify which of the following statements is false.

Accepted Answer

A)  Every grantor is entitled to a $5.25 million exemption from the GSTT in 2011. 
B)  If Greg transfers assets directly to his grandson, this transaction would be an example of a direct skip. 
C)  The GSTT is levied at a flat rate, which is higher than the top rate under the estate tax rate schedule. 
D)  If Shaad transfers property in trust to his son, with the remainder to his grandson, at the death of the son a taxable termination will result. 
A)  Every grantor is entitled to a $5.25 million exemption from the GSTT in 2011. 
B)  If Greg transfers assets directly to his grandson, this transaction would be an example of a direct skip. 
C)  The GSTT is levied at a flat rate, which is higher than the top rate under the estate tax rate schedule. 
D)  If Shaad transfers property in trust to his son, with the remainder to his grandson, at the death of the son a taxable termination will result.

Question 13

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

Accepted Answer

A) True 
 B)False

Question 14

Mary creates and funds a revocable trust. Mary names her son to receive the income for life and her grandson to receive the property upon the son's death. What are Mary's powers with respect to the trust, and how will the trust be treated in her estate?

Accepted Answer

Since the trust is revocable,

Question 15

Identify which of the following statements is true.

Accepted Answer

A)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until six months after the interests of the other person(s) terminate. 
B)  A corporation with 25 owners can be classified as a closely held business if the decedent's gross estate holds 10% of the stock. 
C)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15- year period if elected. 
D)  All of the above are false. 
A)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until six months after the interests of the other person(s) terminate. 
B)  A corporation with 25 owners can be classified as a closely held business if the decedent's gross estate holds 10% of the stock. 
C)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15- year period if elected. 
D)  All of the above are false.

Question 16

Lou dies on April 12, 2015. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2017. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

Accepted Answer

A)  $140,000 
B)  $210,000 
C)  $350,000 
D)  $280,000 
A)  $140,000 
B)  $210,000 
C)  $350,000 
D)  $280,000

Question 17

An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until 6 months after the interests of the other person(s) terminate.

Accepted Answer

A) True 
 B)False

Question 18

In February of this year, Tom dies. Two years and nine months before the date of death, Tom made a gift of stock valued at $2 million. Gift taxes paid on the transfer by Tom were $435,000 after reduction for a $345,800 unified credit ($780,800 - $345,800). At the time of his death, the gifted stock was valued at $2.3 million. The amount included in Tom's gross estate from this transfer is

Accepted Answer

A)  $435,000. 
B)  $2,000,000. 
C)  $2,300,000. 
D)  none of the above 
A)  $435,000. 
B)  $2,000,000. 
C)  $2,300,000. 
D)  none of the above

Question 19

Identify which of the following statements is true.

Accepted Answer

A)  Special powers of appointment give the power holder less restricted powers than a general power of appointment. 
B)  If spouses are the only joint owners, only one- half of the value of the jointly owned property is included in the gross estate, regardless of the relative amount of consideration provided by either spouse. 
C)  The gross estate does not include the value of life insurance policies on the decedent if the proceeds are receivable by the executor or for the benefit of the estate. 
D)  All of the above are false. 
A)  Special powers of appointment give the power holder less restricted powers than a general power of appointment. 
B)  If spouses are the only joint owners, only one- half of the value of the jointly owned property is included in the gross estate, regardless of the relative amount of consideration provided by either spouse. 
C)  The gross estate does not include the value of life insurance policies on the decedent if the proceeds are receivable by the executor or for the benefit of the estate. 
D)  All of the above are false.

Question 20

Which of the following is not a test for an interest to qualify for the marital deduction?

Accepted Answer

A)  If a QTIP transfer is made, the spouse must be entitled to all of the income at least annually for life. 
B)  The interest conveyed must not be a nondeductible terminable interest. 
C)  The property must be included in the decedent's gross estate. 
D)  All of the above are required. 
A)  If a QTIP transfer is made, the spouse must be entitled to all of the income at least annually for life. 
B)  The interest conveyed must not be a nondeductible terminable interest. 
C)  The property must be included in the decedent's gross estate. 
D)  All of the above are required.

A terminable interest is one that ceases upon the passage of time or the occurrence of some event.

Explain why living trusts are popular tax- planning vehicles.

Which of the following is deductible in arriving at the amount of the taxable estate?

Identify which of the following statements is false.

Which of the following is not a credit for purposes of computing the federal estate tax liability?

Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies,

Identify which of the following statements is true.

Identify which of the following statements is false.

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

Mary creates and funds a revocable trust. Mary names her son to receive the income for life and her grandson to receive the property upon the son's death. What are Mary's powers with respect to the trust, and how will the trust be treated in her estate?

Identify which of the following statements is true.

Lou dies on April 12, 2015. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2017. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until 6 months after the interests of the other person(s) terminate.

Identify which of the following statements is true.

Which of the following is not a test for an interest to qualify for the marital deduction?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters

Exam 13: The Estate Tax

A terminable interest is one that ceases upon the passage of time or the occurrence of some event.

Explain why living trusts are popular tax- planning vehicles.

Which of the following is deductible in arriving at the amount of the taxable estate?

Identify which of the following statements is false.

Which of the following is not a credit for purposes of computing the federal estate tax liability?

Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies,

Identify which of the following statements is true.

Identify which of the following statements is false.

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

Mary creates and funds a revocable trust. Mary names her son to receive the income for life and her grandson to receive the property upon the son's death. What are Mary's powers with respect to the trust, and how will the trust be treated in her estate?

Identify which of the following statements is true.

Lou dies on April 12, 2015. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2017. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until 6 months after the interests of the other person(s) terminate.

Identify which of the following statements is true.

Which of the following is not a test for an interest to qualify for the marital deduction?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters