Exam 14: Transfer Taxes and Wealth Planning

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

Which of the following is a True statement about the Federal gift tax return (Form 709)?

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?

The testamentary transfer of property to a qualified charity is deductible in calculating the taxable estate without any ceiling limitation.

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years. After 20 years the trust corpus would revert to Anthony. Which of the following is a True statement?

The Federal transfer taxes are calculated using cumulative lifetime transfers.

A present interest is the right to currently enjoy property or receive income payments from property.

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' 21ˢᵗ 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, and 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?

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.

Which of the following is a True statement?

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.

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.

A terminable interest in property is any interest that terminates during the current year.

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $68,000. What is the amount of the taxable gift?

Which of the following transfers is a completed gift?

Which of the following is a True statement?

A withdrawal of money from a bank account held in joint tenancy with the right of survivorship may constitute a completed gift.

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?

Which of the following is a True statement?

This year Nicholas earned $500,000 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?