Exam 19: Family Tax Planning

What are the advantages of the election to extend the payment of Federal estate taxes when the estate consists largely of an interest in a closely held business?

For deaths in 2019, it is possible for a surviving spouse to receive an additional bypass amount of as much as $11.4 million.

Richard and Marie are joint tenants in a tract of land. Upon Richard's prior death, Marie's income tax basis in the land does not change.

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

Barney creates a trust, income payable to Madison for five years, remainder to Emma. Emma is Barney's daughter and a single parent), and Madison is his 19-year old granddaughter. What might be the justification for this type of trust?

Noncommercial annuity contracts should be valued using the tables issued by the IRS.

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

In making a choice as to which assets to use in carrying out a program of lifetime giving, comment on each of the following assets. a. Installment notes receivable. b. Property subject to recapture of depreciation.

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: Adjusted Fair Market Basis Value Stock in Scarlet Corporation \ 2,000,000 \ 1,000,000 Apartment building 3,000,000 6,000,000 Under Isla's will, all of her property passes to Liam. After Isla's death, Liam's income tax basis in these properties is:

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?

One way to dispute the existence of large goodwill is to argue that the decedent was not a key person in the operation of the business.

Which, if any, of the following statements properly characterizes buy-sell agreements?

Eight months after Noah died, Audrey sold stock that she inherited from him. If the stock was sold for less than its value on the date of Noah's death, Audrey has a short-term capital loss.

The election by an estate of special use valuation as to real estate or the alternate valuation date will have no effect on the income tax basis of the property received by the heirs.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Transfer by death of depreciable property.

A disclaimer by a surviving spouse will generate additional estate tax because it reduces the amount of marital deduction allowed.

In each of the following independent situations, describe the effect of the disclaimer procedure on Ron's taxable estate. In this regard, advise as to how much should be disclaimed, by whom, and whether a disclaimer should be made. All events occur in 2019. a. Ron's will leaves $12,000,000 to his adult son Phil and the remainder $900,000) to Rita Ron's surviving wife). b. Ron's will leaves $12,000,000 to Rita Ron's surviving wife) and the remainder $2,000,000) to his adult daughter Phyllis.

If a decedent's household goods are sold through public auction, the price received should be the valuation used for Federal estate tax purposes.

Andrew makes a gift of securities basis of $1,100,000; fair market value of $800,000) to his son, Carl. What is Carl's income tax basis in the securities?

Buy-sell agreements can be used to help solve the estate tax valuation and liquidity problems involved in the transfer by death of an interest in a small business.