Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 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 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 3

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 4

At the time of his death, Fred held some notes receivable for loans he made to his two daughters, the payment of which he forgives in his will. The amount to be included in Fred's gross estate as to these notes is not affected by his forgiveness.

Accepted Answer

A) True 
 B)False

Question 5

One of the objectives of family tax planning is to minimize income taxes on transfers of property within the family unit.

Accepted Answer

A) True 
 B)False

Question 6

One of the objectives of establishing a program of lifetime giving is to transfer assets that are likely to appreciate in value. Examples include life insurance policies, valuable collections
e.g., art works), vacation homes, and undeveloped real estate. However, such gifts could cause economic problems for certain donees. Explain why.

Accepted Answer

These so called "dry assets" require mai

Question 7

Brad and Heather are husband and wife and live in New Mexico. Under Brad's will, his share of the community property passes to the children. Upon Brad's prior death, there will be a change in her income tax basis in her half of the community property.

Accepted Answer

A) True 
 B)False

Question 8

Concerning the estate tax valuation of a closely held business:

Accepted Answer

A)  Good tax planning argues against any lifetime gifts of ownership interests to other parties. 
B)  Good tax planning strives for a measure of certainty in the valuation if an IRS audit occurs. 
C)  IRS appraisers will determine the estate tax valuation. 
D)  Appraisers for the decedent will determine the estate tax valuation. 
A)  Good tax planning argues against any lifetime gifts of ownership interests to other parties. 
B)  Good tax planning strives for a measure of certainty in the valuation if an IRS audit occurs. 
C)  IRS appraisers will determine the estate tax valuation. 
D)  Appraisers for the decedent will determine the estate tax valuation.

Question 9

A cross-purchase type of buy-sell agreement is suggested when:

Accepted Answer

A)  The business is a partnership. 
B)  The business is a corporation. 
C)  The business has relatively few owners. 
D)  The business has a large number of owners. 
A)  The business is a partnership. 
B)  The business is a corporation. 
C)  The business has relatively few owners. 
D)  The business has a large number of owners.

Question 10

Curt has owned the following assets for a number of years which he gives to his daughter Carla. No gift tax results. Fair Market
$\begin{array} { c c } &\text { Basis } & \text { Value } \ 
\text { Land }&\$ 200,000 & \$ 400,000 \ 
\text { Securities }&800,000 & 600,000 \end{array}$ If Carla immediately sells these assets for $1 million $400,000 + $600,000), she recognizes:

Accepted Answer

A)  No gain or loss. 
B)  A $200,000 LTCG and no loss. 
C)  A $200,000 STCG and $200,000 STCL. 
D)  A $200,000 STCG and no loss. 
E)  A $200,000 LTCG and $200,000 LTCL. 
A)  No gain or loss. 
B)  A $200,000 LTCG and no loss. 
C)  A $200,000 STCG and $200,000 STCL. 
D)  A $200,000 STCG and no loss. 
E)  A $200,000 LTCG and $200,000 LTCL.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Current use valuation as to certain realty.

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-sell agreement
I)Entity buy-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-sell agreement
I)Entity buy-sell agreement
J)Bypass amount
K)No correct choice is given

Question 13

By maximizing the marital deduction, any estate tax is postponed until the death of the surviving spouse, an advantage in present value terms.

Accepted Answer

A) True 
 B)False

Question 14

Using investments worth $3 million, Keith establishes a trust, life estate to Melinda, remainder to Dana.

a. Has Keith made one gift or two gifts?
b. How does your answer affect the Federal transfer tax liabilities?

Accepted Answer

Dana.
b. The life estate proba

Question 15

A well-known artist dies and among her assets is a large number of her unsold paintings. What approach might be taken to lower the value of her estate?

Accepted Answer

A blockage discount might be warranted i

Question 16

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Reasonable cause will justify deferral.

Accepted Answer

A) Income in respect of a decedent IR
D)  
B) Discretionary extension of time to pay estate tax 
C) Extension of time to pay Federal estate tax involving interest in closely held business 
D) Special use valuation as to certain realty 
E) Depreciation recapture potential eliminated
F)Alternate valuation date
G)Election to split gifts
H)No correct choice is given 
A) Income in respect of a decedent IR
D)  
B) Discretionary extension of time to pay estate tax 
C) Extension of time to pay Federal estate tax involving interest in closely held business 
D) Special use valuation as to certain realty 
E) Depreciation recapture potential eliminated
F)Alternate valuation date
G)Election to split gifts
H)No correct choice is given

Question 17

In satisfying the more-than-35% test for qualification, 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

Question 18

The special use valuation method of § 2032A is available for valuing transfers by gift.

Accepted Answer

A) True 
 B)False

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

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.

At the time of his death, Fred held some notes receivable for loans he made to his two daughters, the payment of which he forgives in his will. The amount to be included in Fred's gross estate as to these notes is not affected by his forgiveness.

One of the objectives of family tax planning is to minimize income taxes on transfers of property within the family unit.

Brad and Heather are husband and wife and live in New Mexico. Under Brad's will, his share of the community property passes to the children. Upon Brad's prior death, there will be a change in her income tax basis in her half of the community property.

Concerning the estate tax valuation of a closely held business:

A cross-purchase type of buy-sell agreement is suggested when:

Curt has owned the following assets for a number of years which he gives to his daughter Carla. No gift tax results. Fair Market Basis Value Land \ 200,000 \ 400,000 Securities 800,000 600,000 If Carla immediately sells these assets for $1 million $400,000 + $600,000), she recognizes:

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

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Current use valuation as to certain realty.

By maximizing the marital deduction, any estate tax is postponed until the death of the surviving spouse, an advantage in present value terms.

Using investments worth $3 million, Keith establishes a trust, life estate to Melinda, remainder to Dana. a. Has Keith made one gift or two gifts? b. How does your answer affect the Federal transfer tax liabilities?

A well-known artist dies and among her assets is a large number of her unsold paintings. What approach might be taken to lower the value of her estate?

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Reasonable cause will justify deferral.

In satisfying the more-than-35% test for qualification, 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.

The special use valuation method of § 2032A is available for valuing transfers by gift.

Understanding and Working With the Federal Tax Law

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, 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

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

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.

At the time of his death, Fred held some notes receivable for loans he made to his two daughters, the payment of which he forgives in his will. The amount to be included in Fred's gross estate as to these notes is not affected by his forgiveness.

One of the objectives of family tax planning is to minimize income taxes on transfers of property within the family unit.

Brad and Heather are husband and wife and live in New Mexico. Under Brad's will, his share of the community property passes to the children. Upon Brad's prior death, there will be a change in her income tax basis in her half of the community property.

Concerning the estate tax valuation of a closely held business:

A cross-purchase type of buy-sell agreement is suggested when:

Curt has owned the following assets for a number of years which he gives to his daughter Carla. No gift tax results. Fair Market Basis Value Land \ 200,000 \ 400,000 Securities 800,000 600,000 If Carla immediately sells these assets for $1 million $400,000 + $600,000), she recognizes:

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

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Current use valuation as to certain realty.

By maximizing the marital deduction, any estate tax is postponed until the death of the surviving spouse, an advantage in present value terms.

Using investments worth $3 million, Keith establishes a trust, life estate to Melinda, remainder to Dana. a. Has Keith made one gift or two gifts? b. How does your answer affect the Federal transfer tax liabilities?

A well-known artist dies and among her assets is a large number of her unsold paintings. What approach might be taken to lower the value of her estate?

Match each statement with the correct choice. Some choices may be used more than once or not used at all. -Reasonable cause will justify deferral.

In satisfying the more-than-35% test for qualification, 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.

The special use valuation method of § 2032A is available for valuing transfers by gift.

Understanding and Working With the Federal Tax Law

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, 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