Question 1

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $34,750. What is the amount of the taxable gift?

Accepted Answer

A)  $0-the marital deduction offsets the gift as long as Jayden and Olivia are married by year-end. 
B)  $19,750. 
C)  $34,750. 
D)  $0-this transfer is not gratuitous. 
E)  None of the choices are correct. 
A)  $0-the marital deduction offsets the gift as long as Jayden and Olivia are married by year-end. 
B)  $19,750. 
C)  $34,750. 
D)  $0-this transfer is not gratuitous. 
E)  None of the choices are correct.

Question 2

Andrew and Brianna are married and live in Texas, a community-property state. For their birthdays this year Andrew gave cash gifts of $23,300 to each of his two daughters, and Brianna gave $38,400 to her niece. What is the amount of Andrew's taxable gifts?

Accepted Answer

A)  $4,200. 
B)  $10,000. 
C)  $25,000. 
D)  zero only if Andrew and Brianna elect to split gifts. 
E)  None of the choices are correct. 
A)  $4,200. 
B)  $10,000. 
C)  $25,000. 
D)  zero only if Andrew and Brianna elect to split gifts. 
E)  None of the choices are correct.

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

Property inherited from a decedent has an adjusted basis equal to the value of the property included in the decedent's estate.

Accepted Answer

A) True 
 B)False

Question 5

Alexis transferred $400,000 to a trust with directions to pay income to her spouse, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?

Accepted Answer

A)  $385,000. 
B)  $57,000. 
C)  $375,000. 
D)  $328,000. 
E)  None of the choices are correct. 
A)  $385,000. 
B)  $57,000. 
C)  $375,000. 
D)  $328,000. 
E)  None of the choices are correct.

Question 6

Only complete gifts are subject to the federal gift tax.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  The age of the life tenant. 
B)  The Section 7520 interest rate. 
C)  The value of the property at the time of the transfer. 
D)  The manner in which the trust corpus is invested. 
E)  All of these factors are utilized in the calculation of the value of a life estate in a trust. 
A)  The age of the life tenant. 
B)  The Section 7520 interest rate. 
C)  The value of the property at the time of the transfer. 
D)  The manner in which the trust corpus is invested. 
E)  All of these factors are utilized in the calculation of the value of a life estate in a trust.

Question 8

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Both spouses must consent to any gift-splitting election.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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?

Accepted Answer

A)  Madison's taxable estate will be zero. 
B)  Madison's surviving spouse will have an income tax basis in the inherited property of zero. 
C)  Madison's adjusted gross estate will be zero. 
D)  Madison's estate will have a tentative estate tax of zero. 
E)  None of the choices are correct. 
A)  Madison's taxable estate will be zero. 
B)  Madison's surviving spouse will have an income tax basis in the inherited property of zero. 
C)  Madison's adjusted gross estate will be zero. 
D)  Madison's estate will have a tentative estate tax of zero. 
E)  None of the choices are correct.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The exemption equivalent was repealed in 2010.

Accepted Answer

A) True 
 B)False

Question 17

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

Accepted Answer

A)  A marital deduction and a deduction for casualty losses. 
B)  A marital deduction for transfers of all terminable interests. 
C)  The tax rate schedule for calculating gross transfer taxes. 
D)  A charitable deduction and an annual exclusion. 
E)  None of these choices list characteristics common to both the gift and the estate tax. 
A)  A marital deduction and a deduction for casualty losses. 
B)  A marital deduction for transfers of all terminable interests. 
C)  The tax rate schedule for calculating gross transfer taxes. 
D)  A charitable deduction and an annual exclusion. 
E)  None of these choices list characteristics common to both the gift and the estate tax.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

At her death Serena owned real estate worth $216,750 with her spouse in joint tenancy with the right of survivorship. Serena contributed $72,250 to the original cost of the property and her spouse contributed the remaining $144,500. What amount, if any, is included in Serena's gross estate?

Accepted Answer

A)  $72,250. 
B)  $108,375. 
C)  $72,250 
D)  $0. This property qualifies for the marital deduction. 
E)  None of the choices are correct. 
A)  $72,250. 
B)  $108,375. 
C)  $72,250 
D)  $0. This property qualifies for the marital deduction. 
E)  None of the choices are correct.

Question 20

The tax on cumulative taxable gifts is reduced by the applicable credit regardless of whether any applicable credit was used in prior years.

Accepted Answer

A) True 
 B)False

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $34,750. What is the amount of the taxable gift?

Andrew and Brianna are married and live in Texas, a community-property state. For their birthdays this year Andrew gave cash gifts of $23,300 to each of his two daughters, and Brianna gave $38,400 to her niece. What is the amount of Andrew's taxable gifts?

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.

Property inherited from a decedent has an adjusted basis equal to the value of the property included in the decedent's estate.

Alexis transferred $400,000 to a trust with directions to pay income to her spouse, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?

Only complete gifts are subject to the federal gift tax.

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

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

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

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

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?

Both spouses must consent to any gift-splitting election.

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.

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?

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

The exemption equivalent was repealed in 2010.

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

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

At her death Serena owned real estate worth $216,750 with her spouse in joint tenancy with the right of survivorship. Serena contributed $72,250 to the original cost of the property and her spouse contributed the remaining $144,500. What amount, if any, is included in Serena's gross estate?

The tax on cumulative taxable gifts is reduced by the applicable credit regardless of whether any applicable credit was used in prior years.

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

Exam 14: Transfer Taxes and Wealth Planning

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $34,750. What is the amount of the taxable gift?

Andrew and Brianna are married and live in Texas, a community-property state. For their birthdays this year Andrew gave cash gifts of $23,300 to each of his two daughters, and Brianna gave $38,400 to her niece. What is the amount of Andrew's taxable gifts?

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.

Property inherited from a decedent has an adjusted basis equal to the value of the property included in the decedent's estate.

Alexis transferred $400,000 to a trust with directions to pay income to her spouse, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?

Only complete gifts are subject to the federal gift tax.

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

The applicable credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

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

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

Both spouses must consent to any gift-splitting election.

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.

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?

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

The exemption equivalent was repealed in 2010.

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

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

At her death Serena owned real estate worth $216,750 with her spouse in joint tenancy with the right of survivorship. Serena contributed $72,250 to the original cost of the property and her spouse contributed the remaining $144,500. What amount, if any, is included in Serena's gross estate?

The tax on cumulative taxable gifts is reduced by the applicable credit regardless of whether any applicable credit was used in prior years.

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