Question 1

Which of the following is a completed taxable gift?

Accepted Answer

A)  $20,000 in cash contributed to the committee to reelect Senator BlowHard. 
B)  $15,000 in cash given directly to Valley Hospital for the care of a neighbor who was in an auto accident. 
C)  $18,000 in cash given directly to a needy student to pay for college tuition. 
D)  $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce. 
E)  None of the choices is a completed taxable gift. 
A)  $20,000 in cash contributed to the committee to reelect Senator BlowHard. 
B)  $15,000 in cash given directly to Valley Hospital for the care of a neighbor who was in an auto accident. 
C)  $18,000 in cash given directly to a needy student to pay for college tuition. 
D)  $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce. 
E)  None of the choices is a completed taxable gift.

Question 2

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 3

The probate estate consists of all property owned by the decedent that is excluded from the gross estate.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  $85,000. 
B)  $85,000 if Tyrone had an incident of ownership of the policy at the time of his death. 
C)  zero if Tyrone did not transfer any ownership of the policy within three years of his date of death. 
D)  zero - life insurance proceeds due to the death of the decedent are not included in the gross estate. 
E)  zero if Tyrone's estate uses the insurance proceeds to pay Tyrone's estate tax. 
A)  $85,000. 
B)  $85,000 if Tyrone had an incident of ownership of the policy at the time of his death. 
C)  zero if Tyrone did not transfer any ownership of the policy within three years of his date of death. 
D)  zero - life insurance proceeds due to the death of the decedent are not included in the gross estate. 
E)  zero if Tyrone's estate uses the insurance proceeds to pay Tyrone's estate tax.

Question 5

Last year Diego transferred a life insurance policy worth $75,000 to an irrevocable trust with directions to distribute the corpus of the trust to his grandson, Juan, upon his graduation from college, or to Juan's estate upon his death. Diego paid $5,000 of gift tax on the transfer of the policy. Early this year, Diego died and the insurance company paid $600,000 to the trust. What amount, if any, is included in Diego's gross estate?

Accepted Answer

$605,000
Diego died within thr

Question 6

The applicable credit is designed to:

Accepted Answer

A)  apply only to taxable transfers included in the gross estate. 
B)  prevent taxation of cumulative transfers that do not exceed a certain minimum amount. 
C)  apply to amounts not already eliminated by the exemption equivalent. 
D)  exclude up to $15,000 per individual per year on any individual transfer. 
E)  None of the choices are correct. 
A)  apply only to taxable transfers included in the gross estate. 
B)  prevent taxation of cumulative transfers that do not exceed a certain minimum amount. 
C)  apply to amounts not already eliminated by the exemption equivalent. 
D)  exclude up to $15,000 per individual per year on any individual transfer. 
E)  None of the choices are correct.

Question 7

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a True statement?

Accepted Answer

A)  A serial gift strategy utilizes intervivos gifts to multiple donees over multiple years to maximize the annual exclusion. 
B)  A serial gift strategy works well even if the gifts don't qualify as present interests. 
C)  A bypass trust avoids all estate taxes on the estate of the first spouse to die. 
D)  The income tax savings from holding appreciated property until death is always outweighed by the additional estate tax imposed on the property. 
E)  None of the choices are True. 
A)  A serial gift strategy utilizes intervivos gifts to multiple donees over multiple years to maximize the annual exclusion. 
B)  A serial gift strategy works well even if the gifts don't qualify as present interests. 
C)  A bypass trust avoids all estate taxes on the estate of the first spouse to die. 
D)  The income tax savings from holding appreciated property until death is always outweighed by the additional estate tax imposed on the property. 
E)  None of the choices are True.

Question 11

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 between them. What is the amount of the taxable gifts, if any, made by Christian?

Accepted Answer

A)  $60,000. 
B)  $46,000. 
C)  $34,000. 
D)  $18,000. 
E)  None of the choices are correct - the amount of the taxable gifts cannot be ascertained without valuing each income interest. 
A)  $60,000. 
B)  $46,000. 
C)  $34,000. 
D)  $18,000. 
E)  None of the choices are correct - the amount of the taxable gifts cannot be ascertained without valuing each income interest.

Question 12

Last year Brandon opened a savings account with a deposit of $45,000. The account was in the name of Brandon and Melanie, joint tenancy with the right of survivorship. Melanie did not contribute to the account, but this year she withdrew $18,000. Has Brandon made a taxable gift to Melanie, and if so, in what amount?

Accepted Answer

$3,000
No gift was made at the time of t

Question 13

For the holidays, Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah. Samuel is married to Wendy and they live in a community property state. Has Samuel made any taxable gifts and, if so, in what amounts?

Accepted Answer

$2,500 and $7,000
Since the gifts are fr

Question 14

Aiden transferred $2 million to an irrevocable trust with income to Valeria for her life and the remainder to Jocelyn (or her estate). Calculate the value of the remainder and the life estate if Valeria's age and the prevailing interest rate result in a Table S discount factor for the remainder of 0.47.

Accepted Answer

The remainder value is $940,000 and the

Question 15

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?

Accepted Answer

A)  $22 million is included in Jose's gross estate. 
B)  $15 million is included in Jose's gross estate. 
C)  The $7 million mortgage must be paid by Jose's estate. 
D)  The $7 million mortgage is not deductible if Jose's will transfers the property to a charity. 
E)  All of the choices are correct. 
A)  $22 million is included in Jose's gross estate. 
B)  $15 million is included in Jose's gross estate. 
C)  The $7 million mortgage must be paid by Jose's estate. 
D)  The $7 million mortgage is not deductible if Jose's will transfers the property to a charity. 
E)  All of the choices are correct.

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

The gross estate will not include the value of clothes and other personal items owned by the decedent at the time of death.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  Prevent double taxation of previously taxed gifts. 
B)  Increase the marginal tax rate on previously taxed gifts. 
C)  Increase the marginal tax rate on the taxable estate. 
D)  Remove intervivos transfers from cumulative taxable transfers. 
E)  None of the choices are correct. 
A)  Prevent double taxation of previously taxed gifts. 
B)  Increase the marginal tax rate on previously taxed gifts. 
C)  Increase the marginal tax rate on the taxable estate. 
D)  Remove intervivos transfers from cumulative taxable transfers. 
E)  None of the choices are correct.

Question 19

Gabriel had a taxable estate of $16 million when he died in 2018. Calculate the amount of estate tax due (if any) if Gabriel made prior taxable gifts in 2005 totaling $1 million at which time he claimed an applicable credit of $1 million and paid no tax. Gabriel was unmarried at his death. (Use Exhibit 25-1)

Accepted Answer

The answer of Gabriel had a taxable estate of $16...

Question 20

At his death Titus had a gross estate consisting of $6 million of property. Which of the following is a True statement about Titus' estate or estate tax?

Accepted Answer

A)  Titus must have a probate estate of at least $6 million. 
B)  Titus must have an adjusted gross estate of at least $6 million. 
C)  Titus must have cumulative taxable transfers of at least $6 million. 
D)  Titus must have a tentative transfer tax calculated on at least $2 million of transfers. 
E)  None of the choices are necessarily True. 
A)  Titus must have a probate estate of at least $6 million. 
B)  Titus must have an adjusted gross estate of at least $6 million. 
C)  Titus must have cumulative taxable transfers of at least $6 million. 
D)  Titus must have a tentative transfer tax calculated on at least $2 million of transfers. 
E)  None of the choices are necessarily True.

Which of the following is a completed taxable gift?

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.

The probate estate consists of all property owned by the decedent that is excluded from the gross estate.

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

The applicable credit is designed to:

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

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

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

Which of the following is a True statement?

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 between them. What is the amount of the taxable gifts, if any, made by Christian?

For the holidays, Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah. Samuel is married to Wendy and they live in a community property state. Has Samuel made any taxable gifts and, if so, in what amounts?

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?

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.

The gross estate will not include the value of clothes and other personal items owned by the decedent at the time of death.

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

At his death Titus had a gross estate consisting of $6 million of property. Which of the following is a True statement about Titus' estate or estate tax?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

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State and Local Taxes

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Exam 14: Transfer Taxes and Wealth Planning

Which of the following is a completed taxable gift?

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.

The probate estate consists of all property owned by the decedent that is excluded from the gross estate.

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

The applicable credit is designed to:

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

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

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

Which of the following is a True statement?

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 between them. What is the amount of the taxable gifts, if any, made by Christian?

For the holidays, Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah. Samuel is married to Wendy and they live in a community property state. Has Samuel made any taxable gifts and, if so, in what amounts?

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?

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.

The gross estate will not include the value of clothes and other personal items owned by the decedent at the time of death.

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

At his death Titus had a gross estate consisting of $6 million of property. Which of the following is a True statement about Titus' estate or estate tax?

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The U.S. Taxation of Multinational Transactions

Filters