Exam 18: The Federal Gift and Estate Taxes

The amount of the exemption equivalent is the same for both transfers by gift and transfers by death.

If the value of the gross estate is lower on the alternate valuation date than on the date of death, the date of death valuation cannot be used.

Classify each of the following independent statements:. -Land held as tenants by the entirety with surviving spouse. Decedent provided none of the funds.

Classify each statement appropriately. -State death tax imposed on the estate.

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.

Sally's will passes real estate to Otto her surviving husband). The real estate is worth $8,000,000 but is subject to a mortgage of $2,000,000. The transfer provides Sally's estate with a marital deduction of $6,000,000.

Pauline sells antique furniture to her daughter, Nicole, for $10,000. If the furniture is really worth $100,000, Pauline has made a gift to Nicole of $100,000.

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 statements. -Homer purchases a U.S. savings bond listing title as: "Homer, payable to Bernice upon Homer's death." Bernice is Homer's sister.

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.

Classify each of the following statements: -Hector transfers funds to his aunt so she can obtain a much needed hip operation. The aunt does not qualify as Hector's dependent.

At the time of Clint's death, part of his estate consists of the following. ∙ Roth IRA value of $1,000,000) with Jennifer as the designated beneficiary. ∙ Land worth $3,000,000) held in joint tenancy with Jennifer. Jennifer is Clint's wife and originally furnished the purchase price. ∙ Building worth $3,000,000) held as equal tenants in common with Jennifer and Dana. Dana is Clint's mother, and she originally purchased the property. Under Clint's will, all of his property passes to his wife, Jennifer. How much marital deduction is Clint's estate allowed? Clint and Jennifer live in Tennessee.

Some states impose inheritance taxes, but the Federal tax system does not.

In 2018, Thalia purchased land for $900,000 and lists title in the names of her daughters as follows: "April and Theresa, joint tenants with right of survivorship." In 2020, April and Theresa purchase an apartment building for $1 million as equal tenants in common; April furnished $400,000 and Theresa furnished $600,000 of the cost. April died before Theresa in 2021 when the land is worth $1.5 million and the apartment building is worth $2 million. One of the results of these transactions is:

At the time of his death, Norton was involved in the following: ∙ Owned land in joint tenancy with Emily. The land is worth $600,000 and was purchased by Norton 15 years ago for $150,000. ∙ Owned land in a tenancy by the entirety with his wife Amy. The land is worth $800,000 and was purchased by Norton five years ago for $450,000. ∙ Owned land in an equal tenancy in common with Noah. The land is worth $400,000 and was purchased by Norton four years ago for $300,000. ∙ Owned City of Dayton bonds worth $500,000. What amount is included in Norton's gross estate?

Classify each of the following independent statements:. -Interest on municipal bonds accrued after death.

A husband and wife make a gift of their jointly owned vacation home to their adult children. The gift-splitting election must be made.

Transfers to political organizations are exempt from the application of the Federal gift tax.

All charitable organizations that qualify for estate tax purposes also qualify for income tax purposes.

In 2019, grandparents contribute jointly owned funds to a § 529 qualified tuition plan on behalf of their granddaughter. The maximum annual exclusion allowed to them is $150,000 $30,000 × 5 years).