Exam 18: The Federal Gift and Estate Taxes

Harry and Brenda are husband and wife. Using her funds, Brenda purchases real estate that she lists as: "Harry and Brenda, joint tenants with right of survivorship." If Brenda dies first, all of the value of the real estate is included in her gross estate.

In year 1 and with $100,000, Ronald establishes a joint savings account with his cousin, Allison. In year 2, Allison withdraws the $100,000 and leaves the country. Ronald made a gift to Allison in year 2.

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

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 later withdraws all of the funds.

Which, if any, of the following items is subject to indexation adjusted to reflect inflation)?

An individual generally tries to reduce the present value of any Federal transfer tax liability.

Classify each statement appropriately. -Casualty loss to property before the death of the owner.

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

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

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

At the time of his death, Raul owned a residence with his wife, Manuela, as joint tenants. Manuela purchased the residence 10 years ago at a cost of $300,000; it now has a fair market value of $1.4 million. Raul's estate will be allowed no marital deduction as to the property.

In 2015, Noah and Kelly acquired real estate for $2,000,000 with Noah furnishing $400,000 of the purchase price and Kelly providing the balance. Title to the property is listed as: "Noah and Kelly, equal tenants in common." Noah dies before Kelly in 2019 when the real estate is worth $4,000,000. a. Were there any tax consequences in 2015? Explain. a. and b. As to the real estate, how much is included in Noah's gross estate? b., would it make any difference whether Noah and Kelly are brother and sister or husband and wife? c. As to choices

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

A lifetime transfer that is supported by full and adequate consideration is not a gift.

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

Lyle and Kelly are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Kelly, joint tenants with right of survivorship." If Kelly dies first, none of the land is included in her gross estate.

Peggy gives $200,000 to her grandson. This is an example of a direct skip for purposes of the generation-skipping transfer tax GSTT).

Classify each of the following statements. -Meg gives her 18-year-old son money for his college tuition and living expenses e.g., room and board).

Classify each of the following statements: -Under a prenuptial agreement, Herbert transfers stock to Norma. One month later, Herbert and Norma are married.

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