Exam 25: Transfer Taxes and Wealth Planning

At his death Trevor had a probate estate consisting of $4 million of property.Which of the following is a true statement about Trevor's estate or estate tax?

Both spouses must consent to any gift-splitting election.

This year,Brent by himself purchased season baseball tickets in the exclusive sky club.The price of the tickets was $60,000,and Brent divided the tickets equally with his two brothers (Brent gave one-third of the tickets to each brother).Has Brent made a taxable gift and,if so,in what amount?

Andrew and Brianna are married and live in Texas,a community-property state.For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters,and Brianna gave $34,000 to her niece.What is the amount of Andrew's taxable gifts?

Jayden gave Olivia a ring when she agreed to marry him.The ring is a family heirloom valued at $68,000.What is the amount of the taxable gift?

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Which of the following statements is (are)true?

At his death Titus had a gross estate consisting of $6 million of property.Which of the following is a true statement about Titus' estate or estate tax?

Grace transferred $800,000 into trust with the income to be paid annually to her spouse,Isaiah,for life and the remainder to Taylor.Calculate the amount of the taxable gifts from the transfers.

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters.The three daughters share income equally for five years and then the corpus of the trust is to be divided equally among them.What is the amount of the taxable gifts,if any,made by Christian?

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice,once under the gift tax and again under the estate tax.

The marital and charitable deductions are common to both the estate tax and the gift tax formulas.

A present interest is the right to currently enjoy property or receive income payments from property.

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren.How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

The estate and gift taxes share several common features.Which of the following characteristics is common to both the estate and gift taxes?

Jonathan transferred $90,000 of cash to a trust this year for the benefit of Hannah,age 10.The trustee has the discretion to distribute income or corpus (principal)for Hannah's benefit and is required to distribute all assets to Hannah (or her estate)not later than Hannah's 21^st birthday.What is the amount of the taxable gift?

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Which of the following statements is (are)true for both gratuitous and testamentary transfers?