Question 1

Appraisal methods used to value real estate for estate tax purposes may include

Accepted Answer

A)  capitalization of earnings. 
B)  comparable sales. 
C)  reproduction cost. 
D)  all of the above 
A)  capitalization of earnings. 
B)  comparable sales. 
C)  reproduction cost. 
D)  all of the above

Question 2

Explain how shares of stock traded on a stock exchange are valued. What is the blockage rule?

Accepted Answer

Shares traded on a stock exchange are va

Question 3

Reversionary interests in publicly traded stocks included in a gross estate must be valued

Accepted Answer

A)  by an appraiser. 
B)  using actuarial tables. 
C)  by considering the fact that the transferor has died. 
D)  by an independent actuary. 
A)  by an appraiser. 
B)  using actuarial tables. 
C)  by considering the fact that the transferor has died. 
D)  by an independent actuary.

Question 4

Four years ago, David gave land to Mike that he purchased for $70,000, which is presently worth $100,000. Three years ago, Mike exchanged the land (then worth $150,000) along with a $100,000 cash contribution made by David for a new piece of land worth $250,000. The new land is titled with David and Mike as joint tenants with the right of survivorship. When Mike dies this year, the land is worth $300,000. Mike's estate will include

Accepted Answer

A)  $180,000. 
B)  $300,000. 
C)  $0. 
D)  $150,000. 
A)  $180,000. 
B)  $300,000. 
C)  $0. 
D)  $150,000.

Question 5

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 6

Four years ago, Roper transferred to his son ownership of a $100,000 life insurance policy that Roper purchased on his own life in 2000. The cash value of the policy on the transfer date was $25,000. Roper died on March 1st of this year. The amount included in Roper's gross estate due to the life insurance policy is

Accepted Answer

A)  $0. 
B)  $35,000. 
C)  $100,000. 
D)  $25,000. 
A)  $0. 
B)  $35,000. 
C)  $100,000. 
D)  $25,000.

Question 7

The alternate valuation date can be elected for estate tax purposes only if the election

Accepted Answer

A)  increases the value of the gross estate. 
B)  decreases the value of the gross estate. 
C)  decreases the estate tax liability (after reduction for tax credits). 
D)  Both B and C are required. 
A)  increases the value of the gross estate. 
B)  decreases the value of the gross estate. 
C)  decreases the estate tax liability (after reduction for tax credits). 
D)  Both B and C are required.

Question 8

In 2017, Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?

Accepted Answer

A)  $1,000,000 
B)  $400,000 
C)  $0 
D)  $1,200,000 
A)  $1,000,000 
B)  $400,000 
C)  $0 
D)  $1,200,000

Question 9

Identify which of the following statements is true.

Accepted Answer

A)  Qualified disclaimers are not available for estate planning purposes. 
B)  Special use valuation is available for farmland to help alleviate liquidity problems. 
C)  The transferee is liable for the generation- skipping transfer tax (GSTT) in the case of a direct skip. 
D)  All of the above are false. 
A)  Qualified disclaimers are not available for estate planning purposes. 
B)  Special use valuation is available for farmland to help alleviate liquidity problems. 
C)  The transferee is liable for the generation- skipping transfer tax (GSTT) in the case of a direct skip. 
D)  All of the above are false.

Question 10

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 11

Identify which of the following statements is true.

Accepted Answer

A)  If a marital deduction is elected on a QTIP trust transfer, property remaining in the QTIP trust is not included in the estate of the surviving spouse. 
B)  The unified credit is the only credit allowed against the estate tax. 
C)  The credit for state death taxes has been replaced with a deduction for state estate taxes. 
D)  All of the above are false. 
A)  If a marital deduction is elected on a QTIP trust transfer, property remaining in the QTIP trust is not included in the estate of the surviving spouse. 
B)  The unified credit is the only credit allowed against the estate tax. 
C)  The credit for state death taxes has been replaced with a deduction for state estate taxes. 
D)  All of the above are false.

Question 12

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 13

In 2000, Mike transfers $100,000 of leased land to a trust. The trust income is payable to Mike's son for 13 years, after which time the land is to revert to Mike. This year, Mike dies when the land is valued at $210,000. The applicable federal rate is 10%, and the reversionary actuarial factor is 0.30. How much of the trust value must be included in Mike's estate?

Accepted Answer

0.30 × $21

Question 14

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.

Question 15

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 16

Two years ago, Nils transfers a $200,000 life insurance policy on his life to his daughter, Gail. The policy is worth $60,000 at the time of transfer and Gail pays Nils $50,000. When Nils dies this year, the $50,000 cash is still in a savings account. The consideration offset when computing Nils's gross estate is

Accepted Answer

A)  $0. 
B)  $166,667. 
C)  $50,000. 
D)  $150,000. 
A)  $0. 
B)  $166,667. 
C)  $50,000. 
D)  $150,000.

Question 17

Betty dies on February 20, 2013. Her estate consisted of the following assets, all valued as of her date death: Stock with a basis of $40,000 and a fair market value of $200,000 Home valued at $1,500,000 and a basis of $490,000
Cash of $70,000
Life insurance on Betty's life owned by her daughter with a $500,000 face value
What is Betty's gross estate?

Accepted Answer

A)  $2,270,000 
B)  $600,000 
C)  $1,100,000 
D)  $1,770,000 
A)  $2,270,000 
B)  $600,000 
C)  $1,100,000 
D)  $1,770,000

Question 18

Identify which of the following statements is true.

Accepted Answer

A)  Property included in a decedent's gross estate consists of only that property to which the decedent held title. 
B)  The tax base for the federal estate tax is the total of the decedent's taxable estate and post- 1976 taxable gifts. 
C)  Funeral expenses are not deductible from the gross estate. 
D)  All of the above are false. 
A)  Property included in a decedent's gross estate consists of only that property to which the decedent held title. 
B)  The tax base for the federal estate tax is the total of the decedent's taxable estate and post- 1976 taxable gifts. 
C)  Funeral expenses are not deductible from the gross estate. 
D)  All of the above are false.

Question 19

Melissa transferred $650,000 in trust in 2006: income for life to herself, the remainder to her son. What part, if any, of the value of the trust's assets will be included in Melissa's estate?

Accepted Answer

The entire trust wil

Question 20

When computing the federal estate tax liability in 2018, which of the following taxable estates (not tentative tax) would the unified credit for the current year eliminate all of the tax is

Accepted Answer

A)  $17,800,800. 
B)  $12,000,000. 
C)  $11,180,000. 
D)  $15,555,800. 
A)  $17,800,800. 
B)  $12,000,000. 
C)  $11,180,000. 
D)  $15,555,800.

Appraisal methods used to value real estate for estate tax purposes may include

Explain how shares of stock traded on a stock exchange are valued. What is the blockage rule?

Reversionary interests in publicly traded stocks included in a gross estate must be valued

The alternate valuation date can be elected for estate tax purposes only if the election

In 2017, Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

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?

Identify which of the following statements is true.

Melissa transferred $650,000 in trust in 2006: income for life to herself, the remainder to her son. What part, if any, of the value of the trust's assets will be included in Melissa's estate?

When computing the federal estate tax liability in 2018, which of the following taxable estates (not tentative tax) would the unified credit for the current year eliminate all of the tax is

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Exam 13: The Estate Tax

Appraisal methods used to value real estate for estate tax purposes may include

Explain how shares of stock traded on a stock exchange are valued. What is the blockage rule?

Reversionary interests in publicly traded stocks included in a gross estate must be valued

The alternate valuation date can be elected for estate tax purposes only if the election

In 2017, Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

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?

Identify which of the following statements is true.

Melissa transferred $650,000 in trust in 2006: income for life to herself, the remainder to her son. What part, if any, of the value of the trust's assets will be included in Melissa's estate?

When computing the federal estate tax liability in 2018, which of the following taxable estates (not tentative tax) would the unified credit for the current year eliminate all of the tax is

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

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters