Question 1

The debts of the decedent at the time of death are deducted in calculating the taxable estate.

Accepted Answer

A) True 
 B)False

Question 2

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a true statement?

Accepted Answer

A)  Leaving all property to the surviving spouse maximizes the marital deduction and therefore minimizes total transfer taxes on the estates of both spouses. 
B)  A bypass provision in the will of the deceased spouse is designed to use the applicable credit of the deceased spouse by transferring property to beneficiaries other than the surviving spouse. 
C)  Serial gifts are limited in scope because only $10,000 can be transferred each year tax-free to any specific donee. 
D)  Serial gifts can move significant amounts of wealth only if employed by multiple donors. 
E)  None of the choices are true. 
A)  Leaving all property to the surviving spouse maximizes the marital deduction and therefore minimizes total transfer taxes on the estates of both spouses. 
B)  A bypass provision in the will of the deceased spouse is designed to use the applicable credit of the deceased spouse by transferring property to beneficiaries other than the surviving spouse. 
C)  Serial gifts are limited in scope because only $10,000 can be transferred each year tax-free to any specific donee. 
D)  Serial gifts can move significant amounts of wealth only if employed by multiple donors. 
E)  None of the choices are true.

Question 4

Which of the following statements is (are) true?

Accepted Answer

A)  The same transfer tax rate schedule is used to calculate both the estate tax and the gift tax. 
B)  The transfer tax rate schedule is regressive in nature. 
C)  The amount of the applicable credit varies according to whether the taxable transfer is inter vivos or testamentary. 
D)  The exemption equivalent automatically offsets transfers in calculating cumulative taxable transfers. 
E)  All of the choices are true. 
A)  The same transfer tax rate schedule is used to calculate both the estate tax and the gift tax. 
B)  The transfer tax rate schedule is regressive in nature. 
C)  The amount of the applicable credit varies according to whether the taxable transfer is inter vivos or testamentary. 
D)  The exemption equivalent automatically offsets transfers in calculating cumulative taxable transfers. 
E)  All of the choices are true.

Question 5

This year Evelyn created an irrevocable trust to provide for Ed, her 32-year-old nephew, and Ed's family. Evelyn transferred $145,000 to the trust and named a bank as the trustee. The trust was directed to pay income to Ed until he reaches age 35 (three years from now), and at that time the trust is to be terminated and the corpus is to be distributed to Ed's two children (or their estates). Determine the amount, if any, of the taxable gift. The relevant interest rate is 6 percent. (Round your intermediate calculation to three decimal places.)

Accepted Answer

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The ${{[a(1)]:#,###}}

Question 6

The gift-splitting election only applies to gifts made by taxpayers who reside in community-property states.

Accepted Answer

A) True 
 B)False

Question 7

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

Accepted Answer

A) True 
 B)False

Question 8

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses. The executor charged the estate for $24,000 in fees. What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Accepted Answer

A)  $32,000. 
B)  $37,000. 
C)  $56,000. 
D)  $61,000. 
E)  None of the choices are correct. 
A)  $32,000. 
B)  $37,000. 
C)  $56,000. 
D)  $61,000. 
E)  None of the choices are correct.

Question 9

Which of the following is a true statement?

Accepted Answer

A)  A fiduciary entity is a legal entity that takes possession of property for the benefit of a person. 
B)  An estate is a fiduciaryentity that comes into existence upon a person's death to transfer the decedent's real and personal property. 
C)  A trust is also a fiduciaryentity whose purpose is to hold and administer the corpus for other persons (beneficiaries). 
D)  An estate exists only temporarily, but a trust may have a prolonged or even indefinite existence. 
E)  All of the choices are true. 
A)  A fiduciary entity is a legal entity that takes possession of property for the benefit of a person. 
B)  An estate is a fiduciaryentity that comes into existence upon a person's death to transfer the decedent's real and personal property. 
C)  A trust is also a fiduciaryentity whose purpose is to hold and administer the corpus for other persons (beneficiaries). 
D)  An estate exists only temporarily, but a trust may have a prolonged or even indefinite existence. 
E)  All of the choices are true.

Question 10

This year Samantha gave each of her three nephews birthday gifts of $10,150 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $6,060 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

Accepted Answer

A)  $3,630. 
B)  $32,850. 
C)  $48,630. 
D)  zero-none of the gifts exceed the annual exclusion. 
E)  None of the choices are correct. 
A)  $3,630. 
B)  $32,850. 
C)  $48,630. 
D)  zero-none of the gifts exceed the annual exclusion. 
E)  None of the choices are correct.

Question 11

The probate estate will include the total value of all real property owned by the decedent at the time of death regardless of whether the decedent co-owned the property asa tenant in common or asa joint tenant with the right of survivorship.

Accepted Answer

A) True 
 B)False

Question 12

This year Maria transferred $600,000 to an irrevocable trust that pays equal shares of income annually to four cousins (or their estates) for the next eight years. At that time, the trust is terminated and the corpus of the trust reverts to Maria. Determine the amount, if any, of the current gifts and the taxable gifts if the relevant interest rate is 6 percent and Maria is married and elects to gift-split with her spouse?

Accepted Answer

$51,771 for Maria and $51,771 for Maria'

Question 13

Natalie transferred $500,000 of bonds to a revocable trust with directions to the trustee to pay income to her aunt for five years, after which the corpus is to be distributed to Natalie's niece. At year-end, the trustee paid $16,000 of income to the aunt. Which of the following is a true statement?

Accepted Answer

A)  Natalie has made a complete gift of $500,000. 
B)  Natalie has made a taxable gift of $1,000. 
C)  Natalie has not made a complete gift because the trust is revocable. 
D)  Natalie has made a taxable gift of $16,000. 
E)  None of the choices are correct. 
A)  Natalie has made a complete gift of $500,000. 
B)  Natalie has made a taxable gift of $1,000. 
C)  Natalie has not made a complete gift because the trust is revocable. 
D)  Natalie has made a taxable gift of $16,000. 
E)  None of the choices are correct.

Question 14

When a gift-splitting election is made, gifts made by either spouse during the year will be treated as if each spouse made one-half of the transfer.

Accepted Answer

A) True 
 B)False

Question 15

This year Carlos and Hailey purchased realty for $380,000 and took title as equal tenants in common. However, Hailey was able to provide only $160,000 of the purchase price and Carlos paid the remaining $220,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

Accepted Answer

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Carlos has

Question 16

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Accepted Answer

A) True 
 B)False

Question 17

Ashley owns a whole-life insurance policy worth $26,500 that directs the insurance company to pay the beneficiary $530,000 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?

Accepted Answer

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Because Ash

Question 18

Only complete gifts are subject to the federal gift tax.

Accepted Answer

A) True 
 B)False

Question 19

Harold and Mary are married and live in a community-property state. During the marriage Harold bought a parcel of real estate for $100,000 in community funds and titled the property in his name alone. Mary died on January 30 th of this year and was survived by Harold, who did not remarry. The parcel of real property was worth $250,000 on January 30 th of this year but was only worth $220,000 at year-end. What amount, if any, is included in Mary's gross estate?

Accepted Answer

A)  $250,000. 
B)  $220,000. 
C)  $125,000. 
D)  $110,000. 
E)  zero-Mary had no ownership interest in the property at her death. 
A)  $250,000. 
B)  $220,000. 
C)  $125,000. 
D)  $110,000. 
E)  zero-Mary had no ownership interest in the property at her death.

Question 20

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?

Accepted Answer

$660,000.Both parcels will be included i

The debts of the decedent at the time of death are deducted in calculating the taxable estate.

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Which of the following is a true statement?

Which of the following statements is (are) true?

The gift-splitting election only applies to gifts made by taxpayers who reside in community-property states.

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses. The executor charged the estate for $24,000 in fees. What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Which of the following is a true statement?

This year Samantha gave each of her three nephews birthday gifts of $10,150 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $6,060 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

The probate estate will include the total value of all real property owned by the decedent at the time of death regardless of whether the decedent co-owned the property asa tenant in common or asa joint tenant with the right of survivorship.

Natalie transferred $500,000 of bonds to a revocable trust with directions to the trustee to pay income to her aunt for five years, after which the corpus is to be distributed to Natalie's niece. At year-end, the trustee paid $16,000 of income to the aunt. Which of the following is a true statement?

When a gift-splitting election is made, gifts made by either spouse during the year will be treated as if each spouse made one-half of the transfer.

This year Carlos and Hailey purchased realty for $380,000 and took title as equal tenants in common. However, Hailey was able to provide only $160,000 of the purchase price and Carlos paid the remaining $220,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Only complete gifts are subject to the federal gift tax.

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?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

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Exam 14: Transfer Taxes and Wealth Planning

The debts of the decedent at the time of death are deducted in calculating the taxable estate.

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Which of the following is a true statement?

Which of the following statements is (are) true?

The gift-splitting election only applies to gifts made by taxpayers who reside in community-property states.

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses. The executor charged the estate for $24,000 in fees. What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Which of the following is a true statement?

This year Samantha gave each of her three nephews birthday gifts of $10,150 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $6,060 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

The probate estate will include the total value of all real property owned by the decedent at the time of death regardless of whether the decedent co-owned the property asa tenant in common or asa joint tenant with the right of survivorship.

When a gift-splitting election is made, gifts made by either spouse during the year will be treated as if each spouse made one-half of the transfer.

This year Carlos and Hailey purchased realty for $380,000 and took title as equal tenants in common. However, Hailey was able to provide only $160,000 of the purchase price and Carlos paid the remaining $220,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Only complete gifts are subject to the federal gift tax.

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?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Business Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Non-Liquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Filters