Question 1

A Section 529 education savings plan can only be used for the education of the specific child it was set up to benefit.

Accepted Answer

A) True 
 B)False

Question 2

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?

Accepted Answer

A) $1,600,000; $1,300,000 
B) $1,400,000; $1,300,000 
C) $1,600,000; $1,600,000 
D) $1,400,000; $1,600,000 
A) $1,600,000; $1,300,000 
B) $1,400,000; $1,300,000 
C) $1,600,000; $1,600,000 
D) $1,400,000; $1,600,000

Question 3

Which of the following applies to a simple trust?

Accepted Answer

A) It is allowed a $100 deduction on its income tax return 
B) It is required to make annual charitable contributions 
C) It must distribute its accounting income to its beneficiaries annually 
D) The trustee must distribute capital gain income 
A) It is allowed a $100 deduction on its income tax return 
B) It is required to make annual charitable contributions 
C) It must distribute its accounting income to its beneficiaries annually 
D) The trustee must distribute capital gain income

Question 4

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 5

A trust always involves at least three different individuals.

Accepted Answer

A) True 
 B)False

Question 6

The tax on generation skipping transfers has been repealed.

Accepted Answer

A) True 
 B)False

Question 7

Appreciated property that was inherited in 2019

Accepted Answer

A) will have a stepped-up basis. 
B) avoids income tax on the appreciation prior to the date of death. 
C) avoids income tax on any post inheritance appreciation on a future sale. 
D) (a) and (b) only. 
A) will have a stepped-up basis. 
B) avoids income tax on the appreciation prior to the date of death. 
C) avoids income tax on any post inheritance appreciation on a future sale. 
D) (a) and (b) only.

Question 8

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 9

The alternate valuation date for an estate

Accepted Answer

A) is elected by beneficiaries 
B) should be elected if the size of the estate increases to receive higher bases 
C) values the estate six months after the date of death 
D) does not require the filing of an estate tax return to make the election 
A) is elected by beneficiaries 
B) should be elected if the size of the estate increases to receive higher bases 
C) values the estate six months after the date of death 
D) does not require the filing of an estate tax return to make the election

Question 10

No estate tax is due if a husband leaves his entire estate to his wife.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) John makes a $15,000 payment to Shands Hospital on behalf of Martha. 
B) Cal transferred his half of their house to Colleen as part of their divorce settlement. 
C) Jonathon gave his grandson a Jaguar automobile when he graduated from College. 
D) Both (a) and (b). 
A) John makes a $15,000 payment to Shands Hospital on behalf of Martha. 
B) Cal transferred his half of their house to Colleen as part of their divorce settlement. 
C) Jonathon gave his grandson a Jaguar automobile when he graduated from College. 
D) Both (a) and (b).

Question 12

The alternate valuation date is:

Accepted Answer

A) 3 months after the date of death 
B) 6 months after the date of death 
C) 9 months after the date of death 
D) 12 months after the date of death 
A) 3 months after the date of death 
B) 6 months after the date of death 
C) 9 months after the date of death 
D) 12 months after the date of death

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Painting a house for your mother is not a taxable gift.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A taxpayer can elect to pay a gift tax rather than use part of his or her unified credit.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Glenda, age 8, has $6,150 interest from a trust fund established by her grandfather several years ago.What is Glenda's tax liability?

Accepted Answer

A) $848 
B) $694 
C) $584 
D) $395 
A) $848 
B) $694 
C) $584 
D) $395

Question 19

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 $2,200. 
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 $2,200. 
C) income only from property given to a child 
D) the unearned income of a child in excess of the standard deduction

A Section 529 education savings plan can only be used for the education of the specific child it was set up to benefit.

Which of the following applies to a simple trust?

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

A trust always involves at least three different individuals.

The tax on generation skipping transfers has been repealed.

Appreciated property that was inherited in 2019

Distributable net income

The alternate valuation date for an estate

No estate tax is due if a husband leaves his entire estate to his wife.

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

The alternate valuation date is:

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

Painting a house for your mother is not a taxable gift.

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

A taxpayer can elect to pay a gift tax rather than use part of his or her unified credit.

The annual gift tax exclusion

Glenda, age 8, has $6,150 interest from a trust fund established by her grandfather several years ago.What is Glenda's tax liability?

The kiddie tax can only be imposed on

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

A Section 529 education savings plan can only be used for the education of the specific child it was set up to benefit.

Which of the following applies to a simple trust?

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

A trust always involves at least three different individuals.

The tax on generation skipping transfers has been repealed.

Appreciated property that was inherited in 2019

Distributable net income

The alternate valuation date for an estate

No estate tax is due if a husband leaves his entire estate to his wife.

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

The alternate valuation date is:

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

Painting a house for your mother is not a taxable gift.

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

A taxpayer can elect to pay a gift tax rather than use part of his or her unified credit.

The annual gift tax exclusion

Glenda, age 8, has $6,150 interest from a trust fund established by her grandfather several years ago.What is Glenda's tax liability?

The kiddie tax can only be imposed on

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