Question 1

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Doubles the number of annual exclusions available.

Accepted Answer

A) Revocable trusts 
B) Income in respect of a decedent (IR
D)  
C) Conservation easement 
D) Discretionary extension of time to pay estate tax (§ 6161) 
E) Estate freeze-corporations
F)Extension of time involving interest in closely held business (§ 6166)
G)Special use valuation as to certain realty (§ 2032
A) 
H)Depreciation recapture potential eliminated
I)Alternate valuation date (§ 2032)
J)Election to split gifts (§ 2513)
K)No correct choice is given 
A) Revocable trusts 
B) Income in respect of a decedent (IR
D)  
C) Conservation easement 
D) Discretionary extension of time to pay estate tax (§ 6161) 
E) Estate freeze-corporations
F)Extension of time involving interest in closely held business (§ 6166)
G)Special use valuation as to certain realty (§ 2032
A) 
H)Depreciation recapture potential eliminated
I)Alternate valuation date (§ 2032)
J)Election to split gifts (§ 2513)
K)No correct choice is given

Question 2

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Valuation of life estate interest created by transfer in trust.

Accepted Answer

A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given 
A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given

Question 3

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Valuation of a life insurance policy that is not paid up.

Accepted Answer

A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given 
A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given

Question 4

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Decedent owned stock that had depreciated in value.

Accepted Answer

A) Step-up in basis 
B) Step-down in basis 
C) Gift of installment notes receivable 
D) Gift of property that has § 1245 or § 1250 potential for recapture of depreciation 
E) Donor's basis on date of gift (appreciated property given, no gift tax due)
F)The amount of the deceased spouse's taxable estate does not change
G)Fair market value on date of gift
H)Expected surviving spouse is in good health and 10 years younger
I)No income tax consequences to the beneficiary
J)Income in respect of a decedent (IR
D) 
K)No correct choice is given 
A) Step-up in basis 
B) Step-down in basis 
C) Gift of installment notes receivable 
D) Gift of property that has § 1245 or § 1250 potential for recapture of depreciation 
E) Donor's basis on date of gift (appreciated property given, no gift tax due)
F)The amount of the deceased spouse's taxable estate does not change
G)Fair market value on date of gift
H)Expected surviving spouse is in good health and 10 years younger
I)No income tax consequences to the beneficiary
J)Income in respect of a decedent (IR
D) 
K)No correct choice is given

Question 5

Harvey owns a certificate of deposit listed as: "Harvey, payable on proof of death to April." On Harvey's prior death, the CD is not subject to probate.

Accepted Answer

A) True 
 B)False

Question 6

Jim makes a gift of property (basis of $800,000; fair market value of $600,000) to his wife, Molly. Six months later Molly dies, and under her will, the property (now worth $700,000) returns to Jim. Jim's income tax basis in the property now is $800,000.

Accepted Answer

A) True 
 B)False

Question 7

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Decedent owned traditional IRA that has appreciated.

Accepted Answer

A) Step-up in basis 
B) Step-down in basis 
C) Gift of installment notes receivable 
D) Gift of property that has § 1245 or § 1250 potential for recapture of depreciation 
E) Donor's basis on date of gift (appreciated property given, no gift tax due)
F)The amount of the deceased spouse's taxable estate does not change
G)Fair market value on date of gift
H)Expected surviving spouse is in good health and 10 years younger
I)No income tax consequences to the beneficiary
J)Income in respect of a decedent (IR
D) 
K)No correct choice is given 
A) Step-up in basis 
B) Step-down in basis 
C) Gift of installment notes receivable 
D) Gift of property that has § 1245 or § 1250 potential for recapture of depreciation 
E) Donor's basis on date of gift (appreciated property given, no gift tax due)
F)The amount of the deceased spouse's taxable estate does not change
G)Fair market value on date of gift
H)Expected surviving spouse is in good health and 10 years younger
I)No income tax consequences to the beneficiary
J)Income in respect of a decedent (IR
D) 
K)No correct choice is given

Question 8

Match each statement with the correct choice. Some choices may be used more than once or not used at all
-Valuation of a commercial annuity contract.

Accepted Answer

A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given 
A) Use IRS valuation tables 
B) Blockage rule 
C) Special use value 
D) Best or most suitable use value 
E) Cost of going public
F)Replacement cost of a comparable contract
G)Portion of a deceased spouse's share of community property that passes to a surviving spouse
H)Cross-purchase buy and sell agreement
I)Entity buy and sell agreement
J)Bypass amount
K)No correct choice is given

Question 9

Natalie creates a trust, income payable to Ava (age 12) for 10 years, remainder to Samantha (age 32). In determining the value of these two gifts (i.e., income interest for a term certain and a remainder interest), use of more than one IRS valuation table will be necessary.

Accepted Answer

A) True 
 B)False

Question 10

Under proper circumstances, a disclaimer by an heir may increase the charitable deduction allowed a decedent.

Accepted Answer

A) True 
 B)False

Question 11

A recapture of special use valuation will occur even if a qualified heir ceases to use the property for farming purposes but does not otherwise dispose of it.

Accepted Answer

A) True 
 B)False

Question 12

Liam and Isla are husband and wife and have always lived in a community property state. At the time of Isla's prior death, part of their community property includes:   Under Isla's will, all of her property passes to Liam. After Isla's death, Liam's income tax basis in this property is:

Accepted Answer

A)  $2,500,000. 
B)  $3,500,000. 
C)  $7,000,000. 
D)  $8,000,000. 
E)  None of the above. 
A)  $2,500,000. 
B)  $3,500,000. 
C)  $7,000,000. 
D)  $8,000,000. 
E)  None of the above.

Question 13

Several years ago, Tad purchased land listing ownership as "Tad, Ellen, and Kay, equal tenants in common." In the current year, Kay dies first. One-third of the value of the land is included in Kay's probate estate.

Accepted Answer

A) True 
 B)False

Question 14

Describe the various tax advantages that are available from donating a conservation easement to charity.

Accepted Answer

An income tax deduction is available for

Question 15

Two years ago, Ellen created a revocable trust-life estate to her children, remainder to her grandchildren. When Ellen dies in the current year, none of the trust is included in her gross estate or her probate estate.

Accepted Answer

A) True 
 B)False

Question 16

Andrew makes a gift of securities (basis of $1,100,000; fair market value of $800,000) to his son, Carl. As a result of the transfer, Andrew paid a gift tax of $80,000. What is Carl's income tax basis in the securities if the gift occurred in 2015?

Accepted Answer

Basis for gain is $1,100,000 a

Question 17

In January 2015 and when the annual exclusion was $14,000, Clint makes a gift of his beach house (basis of $114,000; fair market value of $414,000) to his aunt. As a result of the transfer, Clint pays a gift tax of $20,000. The aunt dies in December 2015, when the property is worth $420,000. Under the terms of the aunt's will, the property passes to Clint. Clint's income tax basis in the beach house is:

Accepted Answer

A)  $119,000. 
B)  $129,000. 
C)  $114,000. 
D)  $420,000. 
E)  None of the above. 
A)  $119,000. 
B)  $129,000. 
C)  $114,000. 
D)  $420,000. 
E)  None of the above.

Question 18

Dustin owns all of the stock of Gold Corporation which includes both common and preferred shares. The preferred stock is noncumulative, has no redemption date, and possesses no liquidation preference. In 1995, Dustin makes a gift to his adult children of all of the common stock. He dies in 2015 still owning the preferred stock. The value of the Gold stock on the relevant dates is:   One of the tax consequences of this estate freeze is:

Accepted Answer

A)  Dustin's gross estate includes $0 as to the stock. 
B)  Dustin's gross estate includes $5,000,000 as to the stock. 
C)  Dustin made a gift of $400,000 in 1995. 
D)  Dustin made a gift of $3,400,000 in 1995. 
E)  None of the above is correct. 
A)  Dustin's gross estate includes $0 as to the stock. 
B)  Dustin's gross estate includes $5,000,000 as to the stock. 
C)  Dustin made a gift of $400,000 in 1995. 
D)  Dustin made a gift of $3,400,000 in 1995. 
E)  None of the above is correct.

Question 19

A decedent owned 25% of the voting stock of Siskin Corporation. Siskin has 53 shareholders. The decedent's estate cannot qualify for the § 6166 election.

Accepted Answer

A) True 
 B)False

Question 20

In satisfying the more-than-35% test for qualification under § 6166, interests in multiple closely held businesses are aggregated when the decedent's gross estate includes 20% or more of the value of each such business.

Accepted Answer

A) True 
 B)False

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Doubles the number of annual exclusions available.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of life estate interest created by transfer in trust.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of a life insurance policy that is not paid up.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Decedent owned stock that had depreciated in value.

Harvey owns a certificate of deposit listed as: "Harvey, payable on proof of death to April." On Harvey's prior death, the CD is not subject to probate.

Jim makes a gift of property (basis of $800,000; fair market value of $600,000) to his wife, Molly. Six months later Molly dies, and under her will, the property (now worth $700,000) returns to Jim. Jim's income tax basis in the property now is $800,000.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Decedent owned traditional IRA that has appreciated.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of a commercial annuity contract.

Natalie creates a trust, income payable to Ava (age 12) for 10 years, remainder to Samantha (age 32). In determining the value of these two gifts (i.e., income interest for a term certain and a remainder interest), use of more than one IRS valuation table will be necessary.

Under proper circumstances, a disclaimer by an heir may increase the charitable deduction allowed a decedent.

A recapture of special use valuation will occur even if a qualified heir ceases to use the property for farming purposes but does not otherwise dispose of it.

Liam and Isla are husband and wife and have always lived in a community property state. At the time of Isla's prior death, part of their community property includes: Under Isla's will, all of her property passes to Liam. After Isla's death, Liam's income tax basis in this property is:

Several years ago, Tad purchased land listing ownership as "Tad, Ellen, and Kay, equal tenants in common." In the current year, Kay dies first. One-third of the value of the land is included in Kay's probate estate.

Describe the various tax advantages that are available from donating a conservation easement to charity.

Two years ago, Ellen created a revocable trust-life estate to her children, remainder to her grandchildren. When Ellen dies in the current year, none of the trust is included in her gross estate or her probate estate.

Andrew makes a gift of securities (basis of $1,100,000; fair market value of $800,000) to his son, Carl. As a result of the transfer, Andrew paid a gift tax of $80,000. What is Carl's income tax basis in the securities if the gift occurred in 2015?

A decedent owned 25% of the voting stock of Siskin Corporation. Siskin has 53 shareholders. The decedent's estate cannot qualify for the § 6166 election.

In satisfying the more-than-35% test for qualification under § 6166, interests in multiple closely held businesses are aggregated when the decedent's gross estate includes 20% or more of the value of each such business.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

Exam 19: Family Tax Planning

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Doubles the number of annual exclusions available.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of life estate interest created by transfer in trust.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of a life insurance policy that is not paid up.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Decedent owned stock that had depreciated in value.

Harvey owns a certificate of deposit listed as: "Harvey, payable on proof of death to April." On Harvey's prior death, the CD is not subject to probate.

Jim makes a gift of property (basis of $800,000; fair market value of $600,000) to his wife, Molly. Six months later Molly dies, and under her will, the property (now worth $700,000) returns to Jim. Jim's income tax basis in the property now is $800,000.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Decedent owned traditional IRA that has appreciated.

Match each statement with the correct choice. Some choices may be used more than once or not used at all -Valuation of a commercial annuity contract.

Natalie creates a trust, income payable to Ava (age 12) for 10 years, remainder to Samantha (age 32). In determining the value of these two gifts (i.e., income interest for a term certain and a remainder interest), use of more than one IRS valuation table will be necessary.

Under proper circumstances, a disclaimer by an heir may increase the charitable deduction allowed a decedent.

A recapture of special use valuation will occur even if a qualified heir ceases to use the property for farming purposes but does not otherwise dispose of it.

Liam and Isla are husband and wife and have always lived in a community property state. At the time of Isla's prior death, part of their community property includes: Under Isla's will, all of her property passes to Liam. After Isla's death, Liam's income tax basis in this property is:

Several years ago, Tad purchased land listing ownership as "Tad, Ellen, and Kay, equal tenants in common." In the current year, Kay dies first. One-third of the value of the land is included in Kay's probate estate.

Describe the various tax advantages that are available from donating a conservation easement to charity.

Two years ago, Ellen created a revocable trust-life estate to her children, remainder to her grandchildren. When Ellen dies in the current year, none of the trust is included in her gross estate or her probate estate.

Andrew makes a gift of securities (basis of $1,100,000; fair market value of $800,000) to his son, Carl. As a result of the transfer, Andrew paid a gift tax of $80,000. What is Carl's income tax basis in the securities if the gift occurred in 2015?

A decedent owned 25% of the voting stock of Siskin Corporation. Siskin has 53 shareholders. The decedent's estate cannot qualify for the § 6166 election.

In satisfying the more-than-35% test for qualification under § 6166, interests in multiple closely held businesses are aggregated when the decedent's gross estate includes 20% or more of the value of each such business.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters