Exam 14: Transfer Taxes and Wealth Planning

Matthew and Addison are married and live in Michigan, a common-law state. For the holidays Addison gave cash gifts of $40,000 to each of her two sons, and Matthew gave $40,000 to his daughter. What is the amount of Addison's taxable gifts if Matthew and Addison opt to gift-split?

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?

A transfer of cash to a bank account held in joint tenancy with the right of survivorship is not a complete gift.

A trust is a legal entity that can only exist for a year.

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.

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters. The three daughters share income equally for five years and then the corpus of the trust is to be divided equally among them. What is the amount of the taxable gifts, if any, made by Christian?

The gross estate includes the value of half of real property owned by a decedent and spouse in joint tenancy with the right of survivorship.

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

At his death Trevor had a probate estate consisting of $4 million of property. Which of the following is a true statement about Trevor's estate or estate tax?

At his death Tyrone's life insurance policy paid his estate $85,000. What amount, if any, is included in Tyrone's gross estate?

Which of the following is a true statement?

No deductions are allowed when calculating the taxable estate.

Adjusted taxable gifts are added to the taxable estate to accomplish which of the following objectives?

The calculation of the value of a life estate in a trust generally does not depend upon which of the following factors?

At his death Stanley owned real estate worth $393,240 with two other individuals as equal tenants in common. Stanley contributed $58,000 to the $116,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?

This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $6,000 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

The generation-skipping tax is designed to accomplish which of the following?

Angel and Abigail are married and live in a common-law state. Angel and Abigail own a parcel of realty as joint tenants with the right of survivorship. In addition, Abigail owns another parcel of realty in her name alone. If Abigail should die when the jointly owned realty is worth $2.5 million and her own parcel of realty is worth $3.95 million, what is the total value of realty that would be included in Abigail's gross estate?

When creating an estate tax planning strategy, the income tax benefit derived from a step-up in tax basis on assets should be measured against the estate tax cost of including the assets in the decedent's gross estate.

Which of the following is a complete taxable gift?