Question 1

Identify which of the following statements is false.

Accepted Answer

A)  A gift occurs when a revocable trust is funded. 
B)  A transfer is incomplete (and not subject to the gift tax) if the donor retains the power to name new beneficiaries or to change the interests of the beneficiaries. 
C)  A gift does not occur until the transfer is complete. 
D)  Transfers to an irrevocable trust can be deemed incomplete. 
A)  A gift occurs when a revocable trust is funded. 
B)  A transfer is incomplete (and not subject to the gift tax) if the donor retains the power to name new beneficiaries or to change the interests of the beneficiaries. 
C)  A gift does not occur until the transfer is complete. 
D)  Transfers to an irrevocable trust can be deemed incomplete.

Question 2

Identify which of the following statements is true.

Accepted Answer

A)  Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base. 
B)  The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death. 
C)  The gift tax is not a part of the unified transfer tax system. 
D)  All of the above are false. 
A)  Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base. 
B)  The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death. 
C)  The gift tax is not a part of the unified transfer tax system. 
D)  All of the above are false.

Question 3

What is the due date for the gift tax return? Are there any exceptions? If so, what are they?

Accepted Answer

Gifts always are reportable on a calenda

Question 4

Which of the following transfers is subject to the gift tax?

Accepted Answer

A)  Julia establishes a trust benefiting her nieces and nephews. Julia will determine the amount of any distributions made. 
B)  Frank gives $30,000 to a lobbying group promoting stricter environmental regulations. 
C)  Matilda contributes $5,000 to a Senate candidate's political organization. 
D)  Lance purchases land, titling it in the names of Lance and Sheryl, joint owners. 
A)  Julia establishes a trust benefiting her nieces and nephews. Julia will determine the amount of any distributions made. 
B)  Frank gives $30,000 to a lobbying group promoting stricter environmental regulations. 
C)  Matilda contributes $5,000 to a Senate candidate's political organization. 
D)  Lance purchases land, titling it in the names of Lance and Sheryl, joint owners.

Question 5

Identify which of the following statements is false.

Accepted Answer

A)  Transfers of community property are eligible for the marital exclusion. 
B)  The marital deduction for gift tax purposes is limited to the amount of the includible gift (e.g., the amount of the gift that is in excess of the annual exclusion). 
C)  The marital deduction for gift tax purposes is limited to one- half the value of the property transferred. 
D)  The marital deduction is generally allowed since the transfer remains within the economic (husband/wife) unit. 
A)  Transfers of community property are eligible for the marital exclusion. 
B)  The marital deduction for gift tax purposes is limited to the amount of the includible gift (e.g., the amount of the gift that is in excess of the annual exclusion). 
C)  The marital deduction for gift tax purposes is limited to one- half the value of the property transferred. 
D)  The marital deduction is generally allowed since the transfer remains within the economic (husband/wife) unit.

Question 6

Gloria makes the following gifts during the year: $16,000 cash to her son, Andy
Stock with a basis of $10,000 and a $31,000 fair market value to her sister, Helen
$100,000 to a revocable trust benefiting her nephew, George
Land with a basis of $60,000 and a fair market value of $50,000 to the American Cancer Societ
Before considering the unified credit, what are Gloria's taxable gifts?

Accepted Answer

A)  $95,000 
B)  $121,000 
C)  $17,000 
D)  $45,000 
A)  $95,000 
B)  $121,000 
C)  $17,000 
D)  $45,000

Question 7

In the current year, Melanie makes two transfers to Peter, her husband. In June, she gives him land valued at $50,000. In December, she transfers $500,000 to a trust with a bank named as trustee. All income must be paid to Peter monthly for life. At Peter's death, the property passes to their children. Compute the maximum marital deduction assuming Melanie makes the appropriate elections.

Accepted Answer

A)  $50,000 
B)  $535,000 
C)  $550,000 
D)  $500,000 
A)  $50,000 
B)  $535,000 
C)  $550,000 
D)  $500,000

Question 8

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post- 1976 transfers is reduced by

Accepted Answer

A)  $15,000. 
B)  $30,000. 
C)  $6,000. 
D)  $0. 
A)  $15,000. 
B)  $30,000. 
C)  $6,000. 
D)  $0.

Question 9

Jason funds an irrevocable trust with Liberty Bank as trustee and reserves the right to receive the income for seven years. He provides that at the end of the seventh year, the trust assets will pass outright to his adult daughter, Paula, or to Paula's estate should Paula not be alive. Jason transfers assets valued at $1.5 million to the trust; the assets at present are producing income of about 7.5% per year. Assume that the Sec. 7520 rate per the actuarial tables for the month of the transfer is 10%. What tax issues should Jason consider regarding the trust?

Accepted Answer

• Do the estate freeze rules apply to th

Question 10

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

Accepted Answer

A) True 
 B)False

Question 11

Identify which of the following statements is false.

Accepted Answer

A)  Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed. 
B)  Receipt of an extension of time for filing a gift tax return does not extend the due date for payment of the gift tax. 
C)  The donor pays the gift tax generally. 
D)  Gift tax returns are filed on a calendar- year basis. 
A)  Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed. 
B)  Receipt of an extension of time for filing a gift tax return does not extend the due date for payment of the gift tax. 
C)  The donor pays the gift tax generally. 
D)  Gift tax returns are filed on a calendar- year basis.

Question 12

Identify which of the following statements is true.
A) A statutory exemption from the gift tax is available for property transfers between divorced individuals when the divorce occurs during a three- year period beginning one year before the transfer agreement is made.
B) Cash paid directly to a medical school for room and board is a "qualified transfer" and not subject to the gift tax.
C) Transfers by an individual to a political party constitute a gift subject to the gift tax rules.
D) All of the above are false.

Accepted Answer

The answer of Identify which of the following statements is...

Question 13

Which of the following is a completed gift?

Accepted Answer

A)  Greta transfers $50,000 to a revocable trust benefiting her children Hans and Julio. 
B)  Mike changes the beneficiary of his policy to Meredith. 
C)  Juan purchases a ski chalet using his own funds, but listing Penelope as a joint owner. 
D)  Horatio transfers $60,000 to a bank account with Hazel. Hazel does not contribute any money to the account. 
A)  Greta transfers $50,000 to a revocable trust benefiting her children Hans and Julio. 
B)  Mike changes the beneficiary of his policy to Meredith. 
C)  Juan purchases a ski chalet using his own funds, but listing Penelope as a joint owner. 
D)  Horatio transfers $60,000 to a bank account with Hazel. Hazel does not contribute any money to the account.

Question 14

Identify which of the following statements is true.

Accepted Answer

A)  A qualified disclaimer must be made within six months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later. 
B)  An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
C)  One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property. 
D)  All of the above are false. 
A)  A qualified disclaimer must be made within six months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later. 
B)  An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
C)  One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property. 
D)  All of the above are false.

Question 15

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

Accepted Answer

A) True 
 B)False

Question 16

Hu makes a gift of his home to a local homeless shelter (a 501(c)(3) charity). Hu will retain his home for 10 years, after which the homeless shelter will take possession. The value of Hu's 10- year interest is $30,000 and the remainder interest is valued at $120,000. Which of the following statements is correct?

Accepted Answer

A)  Hu has a charitable contribution deduction of $120,000 on his current gift tax return. 
B)  Hu is not allowed to deduct the contribution until the charity takes possession in 10 years. 
C)  Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year. 
D)  Hu is allowed an exclusion of $15,000 on his gift of $120,000 to the charity. 
A)  Hu has a charitable contribution deduction of $120,000 on his current gift tax return. 
B)  Hu is not allowed to deduct the contribution until the charity takes possession in 10 years. 
C)  Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year. 
D)  Hu is allowed an exclusion of $15,000 on his gift of $120,000 to the charity.

Question 17

The annual exclusion permits donors to make gifts of $15,000 each to multiple donees.

Accepted Answer

A) True 
 B)False

Question 18

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

Accepted Answer

A)  Martha has made a gift to Ned of $1,000. 
B)  Ned has made a gift to Martha of $500. 
C)  Martha has made a gift to Ned of $100. 
D)  Martha has made a gift to Ned of $600. 
A)  Martha has made a gift to Ned of $1,000. 
B)  Ned has made a gift to Martha of $500. 
C)  Martha has made a gift to Ned of $100. 
D)  Martha has made a gift to Ned of $600.

Question 19

Terry is considering transferring assets valued at $400,000 to an irrevocable trust for the benefit of her son, Cliff, age 15, with First National Bank as trustee. Her attorney has drafted a trust agreement that provides that Cliff is to receive income at the trustee's discretion for the next 20 years and that at age 35, the trust assets will be distributed equally between Cliff and his sister Joanna. Terry anticipates that her husband will consent to gift splitting. What tax issues should Terry and her husband consider with respect to the trust she is creating?

Accepted Answer

• Will any portion of Terry's transfer b

Question 20

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

Accepted Answer

Marian's unified credit is red

Identify which of the following statements is false.

Identify which of the following statements is true.

What is the due date for the gift tax return? Are there any exceptions? If so, what are they?

Which of the following transfers is subject to the gift tax?

Identify which of the following statements is false.

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post- 1976 transfers is reduced by

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

Identify which of the following statements is false.

Which of the following is a completed gift?

Identify which of the following statements is true.

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

The annual exclusion permits donors to make gifts of $15,000 each to multiple donees.

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

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 Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters

Exam 12: The Gift Tax

Identify which of the following statements is false.

Identify which of the following statements is true.

What is the due date for the gift tax return? Are there any exceptions? If so, what are they?

Which of the following transfers is subject to the gift tax?

Identify which of the following statements is false.

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post- 1976 transfers is reduced by

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

Identify which of the following statements is false.

Which of the following is a completed gift?

Identify which of the following statements is true.

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

The annual exclusion permits donors to make gifts of $15,000 each to multiple donees.

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

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 Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters