Question 1

Which of the following statements is true?

Accepted Answer

A)  If the donor retains the power to change the trust beneficiary, the gift is complete. 
B)  Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
C)  Transfers to a revocable trust are completed gifts. 
D)  All of the above are false. 
A)  If the donor retains the power to change the trust beneficiary, the gift is complete. 
B)  Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
C)  Transfers to a revocable trust are completed gifts. 
D)  All of the above are false.

Question 2

Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of

Accepted Answer

A)  $60,000. 
B)  $100,000. 
C)  $50,000. 
D)  $0. 
A)  $60,000. 
B)  $100,000. 
C)  $50,000. 
D)  $0.

Question 3

In the current year, Martha makes the transfers below to her husband, Ryan. What is the amount, if any, of her m deduction?
a) In August, she gives him a house valued at $250,000.
b) In December, she gives him a 15- year income interest in a trust with the bank name as trustee. She names he son as the remainderman. The trust is irrevocable and is funded with $500,000 of assets, and 8% is the
applicable interest rate.

Accepted Answer

a) The marital deduction is $235,000 ($2

Question 4

Describe the penalties for undervaluing gifts on a gift tax return.

Accepted Answer

Sec. 6662 imposes a penalty, at one of t

Question 5

Abby transfers $10,000 to a political organization to promote her favorite candidate for president. Does Abby's transfer qualify as a gift?

Accepted Answer

No, political contri

Question 6

On September 1, George transfers his entire ownership rights in a $250,000 life insurance policy on his own life to his sister, Sally. The policy's interpolated terminal reserve is $30,000 as of September 1. On July 1, George had paid the policy's $6,000 annual premium. On July 1 of the subsequent year, George again paid the premium on the policy. What are the gift tax consequences in the subsequent year, if any?

Accepted Answer

As a result of the premium pay

Question 7

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

Accepted Answer

A)  Ellen reimburses her granddaughter $15,000 for her tuition at medical school. 
B)  Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. 
C)  Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. 
D)  Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year. 
A)  Ellen reimburses her granddaughter $15,000 for her tuition at medical school. 
B)  Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. 
C)  Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. 
D)  Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year.

Question 8

Discuss the statutory exemptions from the gift tax.

Accepted Answer

Payments of medical expenses and college

Question 9

Identify which of the following statements is true.

Accepted Answer

A)  The gift tax exclusion is available for a gift of a present or future interest. 
B)  The trustee of a Sec. 2503(c) trust must distribute all of the corpus and accumulated income when the beneficiary reaches the age of 25. 
C)  A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which assets are transferred to the trust. 
D)  All of the above are true. 
A)  The gift tax exclusion is available for a gift of a present or future interest. 
B)  The trustee of a Sec. 2503(c) trust must distribute all of the corpus and accumulated income when the beneficiary reaches the age of 25. 
C)  A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which assets are transferred to the trust. 
D)  All of the above are true.

Question 10

Damitria transfers her rights in a $100,000 insurance policy on June 1 to Tremayne. The policy has a cash value of $9,000 and an interpolated terminal reserve of $8,500. The annual policy premium of $12,000 had been paid on January 1. Damitria's gift (before the annual gift tax exclusion) to Tremayne is

Accepted Answer

A)  $8,500. 
B)  $20,500. 
C)  $9,000. 
D)  $15,500. 
A)  $8,500. 
B)  $20,500. 
C)  $9,000. 
D)  $15,500.

Question 11

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

Accepted Answer

A) True 
 B)False

Question 12

Identify which of the following statements is true.

Accepted Answer

A)  Terminal interests cannot be eligible for the marital deduction. 
B)  Claiming the marital deduction on a QTIP transfer is mandatory. 
C)  When making a QTIP transfer, the donor does not control who will receive the property on the death of the donee- spouse. 
D)  The marital deduction is limited to the amount of the gift that exceeds the annual exclusion. 
A)  Terminal interests cannot be eligible for the marital deduction. 
B)  Claiming the marital deduction on a QTIP transfer is mandatory. 
C)  When making a QTIP transfer, the donor does not control who will receive the property on the death of the donee- spouse. 
D)  The marital deduction is limited to the amount of the gift that exceeds the annual exclusion.

Question 13

Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Melissa's interest is

Accepted Answer

A)  a remainder interest. 
B)  a reversionary interest. 
C)  a term certain. 
D)  a life estate. 
A)  a remainder interest. 
B)  a reversionary interest. 
C)  a term certain. 
D)  a life estate.

Question 14

Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

Accepted Answer

A)  a $4,000 loss. 
B)  a $14,000 loss. 
C)  no loss. 
D)  none of the above 
A)  a $4,000 loss. 
B)  a $14,000 loss. 
C)  no loss. 
D)  none of the above

Question 15

Which of the following statements is true?

Accepted Answer

A)  Gift tax returns are due March 15 in the year following the gift. 
B)  When a married couple elects gift splitting, each spouse is potentially liable for 50% of the gift tax. 
C)  If the donor does not pay the gift tax, the donee is personally liable for the tax. 
D)  Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension. 
A)  Gift tax returns are due March 15 in the year following the gift. 
B)  When a married couple elects gift splitting, each spouse is potentially liable for 50% of the gift tax. 
C)  If the donor does not pay the gift tax, the donee is personally liable for the tax. 
D)  Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension.

Question 16

Identify which of the following statements is false.

Accepted Answer

A)  In order to use gift splitting, both spouses must be U.S. citizens or residents at the time of the transfer. 
B)  The gift- splitting election is made separately on each gift either spouse makes. 
C)  Making gifts during one's lifetime helps to reduce the amount of estate taxes owed at death. 
D)  The gift- splitting election will apply to all transfers made during the portion of any year that the spouses electing gift splitting are married to each other. 
A)  In order to use gift splitting, both spouses must be U.S. citizens or residents at the time of the transfer. 
B)  The gift- splitting election is made separately on each gift either spouse makes. 
C)  Making gifts during one's lifetime helps to reduce the amount of estate taxes owed at death. 
D)  The gift- splitting election will apply to all transfers made during the portion of any year that the spouses electing gift splitting are married to each other.

Question 17

A Crummey trust

Accepted Answer

A)  prohibits the beneficiary from withdrawing assets. 
B)  allows the donor an annual exclusion for transfers. 
C)  receives property that is not eligible for the annual exclusion. 
D)  provides the donor with the ability to retrieve the property. 
A)  prohibits the beneficiary from withdrawing assets. 
B)  allows the donor an annual exclusion for transfers. 
C)  receives property that is not eligible for the annual exclusion. 
D)  provides the donor with the ability to retrieve the property.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

Identify which of the following statements is false.

Accepted Answer

A)  A power of appointment exists when a person transfers property and grants someone else the power to specify who eventually will receive the property. 
B)  The donor must recognize as a gain the excess of the gift tax payable over the adjusted basis of the property. 
C)  The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor. 
D)  A person possesses a general power of appointment if the person has the power to appoint property to himself, his creditors, his estate, or the creditors of his estate. 
A)  A power of appointment exists when a person transfers property and grants someone else the power to specify who eventually will receive the property. 
B)  The donor must recognize as a gain the excess of the gift tax payable over the adjusted basis of the property. 
C)  The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor. 
D)  A person possesses a general power of appointment if the person has the power to appoint property to himself, his creditors, his estate, or the creditors of his estate.

Which of the following statements is true?

Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of

Describe the penalties for undervaluing gifts on a gift tax return.

Abby transfers $10,000 to a political organization to promote her favorite candidate for president. Does Abby's transfer qualify as a gift?

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

Discuss the statutory exemptions from the gift tax.

Identify which of the following statements is true.

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

Identify which of the following statements is true.

Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Melissa's interest is

Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

Which of the following statements is true?

Identify which of the following statements is false.

A Crummey trust

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

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

Identify which of the following statements is false.

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

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

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Exam 12: The Gift Tax

Which of the following statements is true?

Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of

Describe the penalties for undervaluing gifts on a gift tax return.

Abby transfers $10,000 to a political organization to promote her favorite candidate for president. Does Abby's transfer qualify as a gift?

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

Discuss the statutory exemptions from the gift tax.

Identify which of the following statements is true.

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

Identify which of the following statements is true.

Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Melissa's interest is

Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

Which of the following statements is true?

Identify which of the following statements is false.

A Crummey trust

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

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

Identify which of the following statements is false.

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

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

Filters