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. -A gift will cause income tax consequences to the recipient.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Donee's basis for gain.

In each of the following independent situations, describe the effect of the disclaimer procedure on Ray's taxable estate. In this regard, advise as to whether a disclaimer should be made, by whom, and for what amount. Ray died in 2019. a. Ray's will leaves $12,000,000 to his adult son Tyler and the remainder $500,000) to Amy Ray's surviving wife). b. Ray's will leaves $12,000,000 to Amy Ray's surviving wife) and the remainder $3,000,000) to his adult son Tyler. c. Ray's will leaves $12,000,000 to Amy Ray's surviving spouse) and the remainder $500,000) to the local zoo, a qualified charity.

Jude, a resident of New York, purchases realty for $500,000 listing title as "Jude and Tony, joint tenants with right of survivorship." Tony predeceases Jude when the realty is worth $2,000,000. Tony's heirs have an income tax basis in the property of:

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.

With respect to a stock interest in a closely held corporation, which, if any, of the following works to increase the gross estate value of the interest?

At the time of his death, Rex owned an RV. For valuation purposes, the RV should be included in his gross estate at the price a dealer in RVs would pay for the property.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -No step-up in basis at death.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Eliminates preferred stock from donor's gross estate.

Funding an entity type of buy-sell agreement with life insurance requires fewer policies than in the case of the cross- purchase type.

How can a disclaimer by an heir increase the charitable deduction allowed a decedent? Is such a disclaimer always wise? Explain.

The election of special use valuation estate tax savings has income tax implications.

A qualifying heir can make the § 2032A special valuation election only if he is not sure that he will keep the property for the full 10 years.

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

Which, if any, of the following items characterizes the election to defer Federal estate tax payments relative to an interest in a closely held business?

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Corporation agrees to redeem withdrawing shareholder's stock.

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Surviving owners agree to purchase withdrawing owner's interest.

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.

At the time of Elijah's death, he owned stock in Grey Corporation. The stock is traded on a local exchange with the most recent selling prices as follows. Per Share Price Four trading days prior to Elijah's death $120 Six trading days after Elijah's death 100 Presuming no alternate valuation date election, Elijah's gross estate should include a per share value of: a. $108. b. $110. c. $112. d. $120.

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.