Exam 25: Transfer Taxes and Wealth Planning

This year Nicholas earned $500,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh.Has Nicholas made a taxable gift to Nevaeh and,if so,in what amount?

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

Which of the following is a true statement about the federal gift tax return (Form 709)?

For the holidays,Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah.Samuel is married to Wendy and they live in a community-property state.Has Samuel made any taxable gifts and,if so,in what amounts?

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship.Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000.What amount,if any,is included in Serena's gross estate?

A trust is a legal entity that can only exist for a year.

Which of the following transactions would not utilize the "Section 7520 rate" to calculate the value of the transfer?

Ryan placed $280,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate).At the time of the gift,given the prevailing interest rate,Stephen's life estate was valued at $165,000 and the remainder at $115,000.What is the amount,if any,of Ryan's taxable gifts?

Which of the following is a true statement?

An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death.The policy was only valued at $25,000 prior to Tricia's death.What amount,if any,is included in Tricia's gross estate?

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years.After 20 years the trust corpus would revert to Anthony.Which of the following is a true statement?

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.

The testamentary transfer of property to a qualified charity is deductible in calculating the taxable estate without any ceiling limitation.

Which of the following is a complete taxable gift?

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses.The executor charged the estate for $24,000 in fees.What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

At her death Siena owned real estate worth $200,000 that was titled with her sister in joint tenancy with the right of survivorship.Siena contributed $50,000 to the total cost of the property and her sister contributed the remaining $75,000.What amount,if any,is included in Siena's gross estate?

The applicable credit is designed to:

A transfer of a terminable interest will not generally qualify for a marital deduction.

A transfer of cash to a bank account held in joint tenancy with the right of survivorship is not a complete gift.