Exam 25: Transfer Taxes and Wealth Planning

This year Don and his son purchased real estate for an investment. The price of the property was $576,000, and the title named Don and his son as joint tenants with the right of survivorship. Don provided $340,000 of the purchase price and his son provided the remaining $236,000. Has Don made a taxable gift and, if so, in what amount?

This year Carlos and Hailey purchased realty for $500,000 and took title as equal tenants in common. However, Hailey was able to provide only $200,000 of the purchase price and Carlos paid the remaining $300,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

Jonathan transferred $90,000 of cash to a trust this year for the benefit of Hannah, age 10. The trustee has the discretion to distribute income or corpus (principal)for Hannah's benefit and is required to distribute all assets to Hannah (or her estate)not later than Hannah's 21 ^st birthday. What is the amount of the taxable gift?

No deductions are allowed when calculating the taxable estate.

Ava transferred $1.5 million of real estate into an irrevocable trust for her son, Luis. The trustee was directed to retain income until Luis' 21 ^st birthday and then pay him the corpus of the trust. Ava retained the power to require the trustee to pay income to Luis at any time, andretained the right to the assets if Luis predeceased her. What amount of the trust, if any, will be included in Ava's estate if she died shortly after making the transfer?

Proceeds of life insurance paid to the decedent's estate due to the death of the decedent are included in the decedent's gross estate even if the decedent had no ownership rights in the policy at the time of death.

This year Samantha gave each of her three nephews birthday gifts of $10,350 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $6,140 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

At his death Jose owned real estate worth $22 million but subject to a mortgage of $7 million. Which of the following is a true statement?

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their three children and seven grandchildren. How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

A gift tax return does not need to be filed unless the taxpayer has made current gifts in excess of the applicable credit.

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.

Adrian owns two parcels of real estate. Parcel #1 is worth $400,000 and Parcel #2 is worth $660,000. Adrian plans to bequeath Parcel #1 directly to his spouse, Sofia, and leave her a life estate in Parcel #2. What amounts will be included in Adrian's taxable estate for these two parcels?

Sophia is single and owns the following property: Sophia owns the real property in joint tenancy with Daniel. They purchased the property several years ago for $1 million. Sophia was only able to provide $200,000 of the purchase price. If Sophia dies, what is the amount of her gross estate?

Andrew and Brianna are married and live in Texas, a community-property state. For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters, and Brianna gave $34,000 to her niece. What is the amount of Andrew's taxable gifts?

This year Nicholas earned $580,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh. Has Nicholas made a taxable gift to Nevaeh and, if so, in what amount?

A transfer of a terminable interest will not generally qualify for a marital deduction.

Ashley owns a whole-life insurance policy worth $27,500 that directs the insurance company to pay the beneficiary $550,000 on her death. Ashley pays the annual policy premiums and has the power to designate the beneficiary of the policy. What value of the policy, if any, would be included in Ashley's estate upon her death?

At her death Emily owned real estate worth $2.5 million and other property worth $10 million. Property taxes of $200,000 were accrued on the real estate at the time of Emily's death. Which of the following is a true statement with respect to these items without considering any other owned property?

A future interest is a right to receive income or property in the future.

Madison was married at the time of her death and her gross estate consisted of $22 million in stock and bonds. Madison left all of her property to her spouse. What is the result?