Question 1

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Exemption equivalent

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 2

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 3

Five years ago, Emma purchased a residence and listed ownership as tenants by the entirety with her husband, Lucas. In the current year, Lucas predeceases Emma. Nothing is included in either the gross estate or probate estate of Lucas.

Accepted Answer

A) True 
 B)False

Question 4

Any recapture of special use valuation estate tax savings is imposed on the executor of the estate.

Accepted Answer

A) True 
 B)False

Question 5

When will the price specified in a buy and sell agreement control the value used for estate tax purposes?

Accepted Answer

The price set forth controls when these

Question 6

Jacob makes a gift of property (basis of $100,000; fair market value of $500,000) to his aunt, Mary. Ten months later and when the property is worth $550,000, Mary dies. Under Mary's will, the property passes to Isabella (Jacob's wife). Isabella's basis in the property is $550,000.

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.
-Surviving spouse disclaims inheritance in favor of bypass amount.

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.
-Measure of income tax deduction on a gift of depreciated property to charity.

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 9

At the time of his death, Al owned a majority interest in Macaw Corporation, a closely held holding company. Macaw's major asset is stock in ABC Grocers, a regional supermarket chain. The ABC stock has a per share basis to Macaw of $50 and is currently worth $2,000. In what manner, if any, may these facts have a bearing on the value of the Macaw stock included in Al's gross estate?

Accepted Answer

Before the estate can enjoy the value of

Question 10

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 11

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Maximize marital deduction.

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 12

If the special use valuation method of § 2032A is elected and certain continuing requirements are not satisfied, recapture occurs. What is the amount of recapture and upon whom is it imposed?

Accepted Answer

​
The amount recaptured is the estate ta

Question 13

In arriving at the valuation of assets for estate tax purposes, the location of the property is irrelevant.

Accepted Answer

A) True 
 B)False

Question 14

Wesley has created an irrevocable trust: life estate to Eve, remainder to Ernest upon Eve's death. In using the IRS valuation tables, what information is needed to determine the value of Eve's life estate?

Accepted Answer

Besides the amount placed in trust, it i

Question 15

Eric, age 80, has accumulated about $6 million in net assets. Among his assets are the following marketable securities held as investments. $$\begin{array} { l c c } 
& \text { Basis } & \text { FMV } \
\text { Cardinal Corporation stock } & \$ 200,000 & \$ 250,000 \
\text { Crane Corporation stock } & 300,000 & 250,000 \
\text { Hawk Corporation stock } & 50,000 & 250,000
\end{array}$$ Eric would like to donate (either by lifetime or testamentary transfer) $250,000 in value to his church. In addition, to consummate a land deal, he needs $250,000 in cash. Looking solely to tax considerations and using only the assets described above, Eric's best choice is to:

Accepted Answer

A) Donate by gift to the church the Crane stock and sell the Hawk stock now. 
B) Donate by death to the church the Hawk stock and sell the Cardinal stock now. 
C) Donate by gift to the church the Hawk stock and sell the Crane stock now. 
D) Donate by gift to the church the Cardinal stock and sell the Hawk stock now. 
E) None of the above is an attractive technique. 
A) Donate by gift to the church the Crane stock and sell the Hawk stock now. 
B) Donate by death to the church the Hawk stock and sell the Cardinal stock now. 
C) Donate by gift to the church the Hawk stock and sell the Crane stock now. 
D) Donate by gift to the church the Cardinal stock and sell the Hawk stock now. 
E) None of the above is an attractive technique.

Question 16

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Marital deduction allowed.

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 17

Mel's estate includes a number of notes receivable signed by his daughter, Tammy. These notes were issued by Tammy on different occasions when she obtained funds from Mel. The total face amount of these notes is $150,000. The notes are forgiven by Mel's will. How much, if any, regarding these notes should be included in Mel's gross estate?

Accepted Answer

Unless the parties can prove otherwise,

Question 18

Derrick dies, and under the terms of his will, all of his property passes outright to Dionne (Derrick's surviving wife). Under these circumstances, there is no need for Derrick's executor to make a QTIP election.

Accepted Answer

A) True 
 B)False

Question 19

The quantity of stock that a decedent owns in a closely held corporation can have an effect on its valuation. Explain this statement.

Accepted Answer

If the interest held is small, particula

Question 20

Paul dies and leaves his traditional IRA to Evelyn. Which statement is correct?

Accepted Answer

A) Because of the step-up in basis received at death, the IRA causes no income tax consequences to Evelyn. 
B) The IRA is not included in Paul's gross estate. 
C) If Evelyn is Paul's daughter, she can defer any distributions from the IRA until she reaches age 70 1/2 without causing any adverse tax consequences. 
D) If Evelyn is Paul's surviving spouse, she can roll over the IRA into her own IRA without causing any adverse tax consequences. 
E) None of the above. 
A) Because of the step-up in basis received at death, the IRA causes no income tax consequences to Evelyn. 
B) The IRA is not included in Paul's gross estate. 
C) If Evelyn is Paul's daughter, she can defer any distributions from the IRA until she reaches age 70 1/2 without causing any adverse tax consequences. 
D) If Evelyn is Paul's surviving spouse, she can roll over the IRA into her own IRA without causing any adverse tax consequences. 
E) None of the above.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Exemption equivalent

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.

Five years ago, Emma purchased a residence and listed ownership as tenants by the entirety with her husband, Lucas. In the current year, Lucas predeceases Emma. Nothing is included in either the gross estate or probate estate of Lucas.

Any recapture of special use valuation estate tax savings is imposed on the executor of the estate.

When will the price specified in a buy and sell agreement control the value used for estate tax purposes?

Jacob makes a gift of property (basis of $100,000; fair market value of $500,000) to his aunt, Mary. Ten months later and when the property is worth $550,000, Mary dies. Under Mary's will, the property passes to Isabella (Jacob's wife). Isabella's basis in the property is $550,000.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Surviving spouse disclaims inheritance in favor of bypass amount.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Measure of income tax deduction on a gift of depreciated property to charity.

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. -Maximize marital deduction.

If the special use valuation method of § 2032A is elected and certain continuing requirements are not satisfied, recapture occurs. What is the amount of recapture and upon whom is it imposed?

In arriving at the valuation of assets for estate tax purposes, the location of the property is irrelevant.

Wesley has created an irrevocable trust: life estate to Eve, remainder to Ernest upon Eve's death. In using the IRS valuation tables, what information is needed to determine the value of Eve's life estate?

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Marital deduction allowed.

Derrick dies, and under the terms of his will, all of his property passes outright to Dionne (Derrick's surviving wife). Under these circumstances, there is no need for Derrick's executor to make a QTIP election.

The quantity of stock that a decedent owns in a closely held corporation can have an effect on its valuation. Explain this statement.

Paul dies and leaves his traditional IRA to Evelyn. Which statement is correct?

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

Multi-State Corporate Taxations

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. -Exemption equivalent

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.

Five years ago, Emma purchased a residence and listed ownership as tenants by the entirety with her husband, Lucas. In the current year, Lucas predeceases Emma. Nothing is included in either the gross estate or probate estate of Lucas.

Any recapture of special use valuation estate tax savings is imposed on the executor of the estate.

When will the price specified in a buy and sell agreement control the value used for estate tax purposes?

Jacob makes a gift of property (basis of $100,000; fair market value of $500,000) to his aunt, Mary. Ten months later and when the property is worth $550,000, Mary dies. Under Mary's will, the property passes to Isabella (Jacob's wife). Isabella's basis in the property is $550,000.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Surviving spouse disclaims inheritance in favor of bypass amount.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Measure of income tax deduction on a gift of depreciated property to charity.

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. -Maximize marital deduction.

If the special use valuation method of § 2032A is elected and certain continuing requirements are not satisfied, recapture occurs. What is the amount of recapture and upon whom is it imposed?

In arriving at the valuation of assets for estate tax purposes, the location of the property is irrelevant.

Wesley has created an irrevocable trust: life estate to Eve, remainder to Ernest upon Eve's death. In using the IRS valuation tables, what information is needed to determine the value of Eve's life estate?

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Marital deduction allowed.

Derrick dies, and under the terms of his will, all of his property passes outright to Dionne (Derrick's surviving wife). Under these circumstances, there is no need for Derrick's executor to make a QTIP election.

The quantity of stock that a decedent owns in a closely held corporation can have an effect on its valuation. Explain this statement.

Paul dies and leaves his traditional IRA to Evelyn. Which statement is correct?

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

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters