Exam 27: The Federal Gift and Estate Taxes

To avoid the terminable interest limitation on the marital deduction, a QTIP election is made.

In the case of a transfer by gift, a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

The Federal transfer tax system includes three separate taxes.

Accrued interest on state and local bonds is not subject to the Federal estate tax.

Sam purchases a U.S. savings bond that he registers as follows: "Sam, payable to Don upon Sam's death." A gift occurs when Sam purchases the bond.

Classify each of the following independent statements:. -State income tax refund received after death on a tax return filed before death.

Waldo is his mother's sole heir and is the designated executor of her estate. Although the alternate valuation date would yield a smaller gross estate and less estate tax liability, the election is not made. Instead, Waldo files a Form 706 for his mother's estate using higher date of death values. Why?

Classify each statement appropriately. -Post-death property taxes paid to the county on realty included in the gross estate.

Manfredo makes a donation of $50,000 to the church in Mexico City where he was baptized. The gift does not qualify as a charitable contribution for Federal income tax purposes.

Which, if any, of the following statements correctly reflects the rules applicable to the alternate valuation date?

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

Georgia owns an insurance policy on the life of Jake with Scarlet as the designated beneficiary. Upon Scarlet's death, no Federal transfer tax consequences result.

Classify each of the following statements: -Under her father's will, Faith is to receive 10,000 shares of GE common stock. Ten months after her father's death, Faith disclaims 10,000 shares.

Concerning the Federal tax on generation-skipping transfers:

Classify each of the following statements. -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace predeceases Nadine.

Which, if any, of the following is not a characteristic of the Federal gift tax?

At the time of Dylan's death, he was a resident of the United States. He owns land located in a foreign country, which is subject to that country's estate tax. This same land also can be subject to the Federal estate tax.

The Federal transfer taxes generally apply a flat rate of:

Classify each of the following statements. -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Mandy and Hal (mother and son) purchased land for $600,000 as joint tenants with right of survivorship. Of the $600,000 purchase price, Mandy provided $300,000 and Hal $300,000 (of which $200,000 had been received as a gift from Mandy). Hal dies first when the land is worth $3,000,000. As to the land, Hal's gross estate must include: