Question 1

On March 1, Sue transfers stock worth $20,000 to Frank. How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

Accepted Answer

A) six months 
B) one year 
C) three years 
D) No minimum time period exists, but she must be alive at transfer of ownership. 
A) six months 
B) one year 
C) three years 
D) No minimum time period exists, but she must be alive at transfer of ownership. D

Question 2

Identify which of the following statements is true.

Accepted Answer

A) Reversionary interests of less than 5% are includible in the gross estate. 
B) A reversionary interest means a chance exists that the property may pass back to the transferor under the terms of the transfer. 
C) If a reversionary interest exceeds 3% of the property's value, the amount that is included in the estate is not the value of the reversionary interest, but rather the date-of-death value of the gifted property less the value of intervening life estates. 
D) All of the above are false. 
A) Reversionary interests of less than 5% are includible in the gross estate. 
B) A reversionary interest means a chance exists that the property may pass back to the transferor under the terms of the transfer. 
C) If a reversionary interest exceeds 3% of the property's value, the amount that is included in the estate is not the value of the reversionary interest, but rather the date-of-death value of the gifted property less the value of intervening life estates. 
D) All of the above are false. B

Question 3

A qualified disclaimer is a valuable estate planning tool because

Accepted Answer

A) it establishes the value of the disclaimed assets. 
B) it qualifies the assets for the alternative valuation date. 
C) it is not treated as a gift made by the person who disclaims. 
D) it allows the person making the disclaimer to determine the recipient. 
A) it establishes the value of the disclaimed assets. 
B) it qualifies the assets for the alternative valuation date. 
C) it is not treated as a gift made by the person who disclaims. 
D) it allows the person making the disclaimer to determine the recipient. C

Question 4

Dan transfers an apartment building to Grace but retains the right to the rental income for 10 years. Dan dies nine years after the transfer when the building is worth $600,000. The applicable federal rate is 10% and the reversionary actuarial factor is 0.30. How much would be included in Dan's estate?

Accepted Answer

A) $0 
B) $150,000 
C) $350,000 
D) $600,000 
A) $0 
B) $150,000 
C) $350,000 
D) $600,000

Question 5

In 2016, Roger gives stock valued at $100,000 to Martha. Roger and Martha are not related. In 2018, Martha uses the stock then valued at $110,000 as partial consideration to acquire realty costing $220,000. Pat (her brother)furnishes the remaining $110,000 of consideration. The realty is titled in the names of Martha and Pat as joint tenants with right of survivorship. This year, Martha dies and Pat survives. The realty is valued at $300,000 at Martha's death. How much, if any, of the realty's value will be included in Martha's estate?

Accepted Answer

A) $0 
B) $110,000 
C) $150,000 
D) $300,000 
A) $0 
B) $110,000 
C) $150,000 
D) $300,000

Question 6

Identify which of the following statements is true.

Accepted Answer

A) A courtesy interest is a widower's interest in his deceased wife's property. 
B) All gifts made within three years of the date of death must be included in the gross estate. 
C) Dower rights are not the same as courtesy rights. 
D) All of the above are false. 
A) A courtesy interest is a widower's interest in his deceased wife's property. 
B) All gifts made within three years of the date of death must be included in the gross estate. 
C) Dower rights are not the same as courtesy rights. 
D) All of the above are false.

Question 7

Proceeds of a life insurance policy payable to the estate's executor, as the estate's representative, are

Accepted Answer

A) includible in the decedent's gross estate only if the premiums had been paid by the insured. 
B) includible in the decedent's gross estate only if the policy was taken out within three years of the insured's death. 
C) never includible in the decedent's gross estate. 
D) always includible in the decedent's gross estate. 
A) includible in the decedent's gross estate only if the premiums had been paid by the insured. 
B) includible in the decedent's gross estate only if the policy was taken out within three years of the insured's death. 
C) never includible in the decedent's gross estate. 
D) always includible in the decedent's gross estate.

Question 8

Identify which of the following statements is true.

Accepted Answer

A) The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1976 taxable gifts. 
B) Property included in a decedent's gross estate consists of only that property to which the decedent held title. 
C) Funeral expenses are not deductible from the gross estate. 
D) All of the above are false. 
A) The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1976 taxable gifts. 
B) Property included in a decedent's gross estate consists of only that property to which the decedent held title. 
C) Funeral expenses are not deductible from the gross estate. 
D) All of the above are false.

Question 9

The estate tax is a wealth transfer tax.

Accepted Answer

A) True 
 B)False

Question 10

An executor can value each asset in an estate at the lower of its FMV at death or the alternate valuation date.

Accepted Answer

A) True 
 B)False

Question 11

Briefly discuss how inter vivos gifts can be used to reduce the size of the estate tax base.

Accepted Answer

The $15,000 per-donee per-year exclusion

Question 12

Identify which of the following statements is true.

Accepted Answer

A) Administrative expenses are not deductible on the estate's income tax return. 
B) Casualty or theft losses incurred during the administration of the estate are not deductible on the estate tax return. 
C) There is a limitation of $100,000 on the charitable contribution deduction for estate tax purposes. 
D) All of the above are false. 
A) Administrative expenses are not deductible on the estate's income tax return. 
B) Casualty or theft losses incurred during the administration of the estate are not deductible on the estate tax return. 
C) There is a limitation of $100,000 on the charitable contribution deduction for estate tax purposes. 
D) All of the above are false.

Question 13

Identify which of the following statements is false.

Accepted Answer

A) To qualify for the marital deduction, property must be includible in the decedent's gross estate. 
B) Property is not eligible for the marital deduction if it passes to the spouse under the individual's dower rights. 
C) A terminable interest is one that ceases upon the passage of time or the occurrence of some event. 
D) Some, but not all, terminal interests qualify for the marital deduction. 
A) To qualify for the marital deduction, property must be includible in the decedent's gross estate. 
B) Property is not eligible for the marital deduction if it passes to the spouse under the individual's dower rights. 
C) A terminable interest is one that ceases upon the passage of time or the occurrence of some event. 
D) Some, but not all, terminal interests qualify for the marital deduction.

Question 14

Four years ago, David gave land to Mike that he purchased for $70,000, which is presently worth $100,000. Three years ago, Mike exchanged the land (then worth $150,000)along with a $100,000 cash contribution made by David for a new piece of land worth $250,000. The new land is titled with David and Mike as joint tenants with the right of survivorship. When Mike dies this year, the land is worth $300,000. Mike's estate will include

Accepted Answer

A) $0. 
B) $150,000. 
C) $180,000. 
D) $300,000. 
A) $0. 
B) $150,000. 
C) $180,000. 
D) $300,000.

Question 15

The value of stock that is not publicly traded may be determined by considering

Accepted Answer

A) the nature and history of the business. 
B) earning capacity. 
C) dividend-paying capacity. 
D) all of the above 
A) the nature and history of the business. 
B) earning capacity. 
C) dividend-paying capacity. 
D) all of the above

Question 16

Four years ago, Roper transferred to his son ownership of a $100,000 life insurance policy that Roper purchased on his own life in 2000. The cash value of the policy on the transfer date was $25,000. Roper died on March 1st of this year. The amount included in Roper's gross estate due to the life insurance policy is

Accepted Answer

A) $0. 
B) $25,000. 
C) $35,000. 
D) $100,000. 
A) $0. 
B) $25,000. 
C) $35,000. 
D) $100,000.

Question 17

Identify which of the following statements is true.

Accepted Answer

A) In general, an estate tax return is not required to be filed unless the value of the gross estate and adjusted taxable gifts exceeds the exemption equivalent. 
B) Estate taxes must be paid when the return is filed, including any extensions. 
C) The estate tax return is due, ignoring extensions, 12 months after the decedent's date of death. 
D) All of the above are false. 
A) In general, an estate tax return is not required to be filed unless the value of the gross estate and adjusted taxable gifts exceeds the exemption equivalent. 
B) Estate taxes must be paid when the return is filed, including any extensions. 
C) The estate tax return is due, ignoring extensions, 12 months after the decedent's date of death. 
D) All of the above are false.

Question 18

Which of the following credits is available for estate tax purposes?

Accepted Answer

A) investment tax credit 
B) credit for income taxes paid on decedent's final return 
C) credit for estate taxes paid on certain prior transfers 
D) All of the above are available. 
A) investment tax credit 
B) credit for income taxes paid on decedent's final return 
C) credit for estate taxes paid on certain prior transfers 
D) All of the above are available.

Question 19

At Mark's death, Mark owed a debt of $40,000 plus $2,000 of accrued interest. Mark's funeral expenses were $5,000, and Mark's charge card had a balance due of $400. The expected administration costs for the estate are $2,000. Assume the estate will owe no income taxes in the next few years and that the taxable estate is expected to be in excess of $1 million. What amount should the estate deduct?

Accepted Answer

All the expenses are deductible: $40,000

Question 20

Identify which of the following statements is true.

Accepted Answer

A) The unified credit is the only credit common to both the gift and estate tax computation. 
B) For estate tax purposes, publicly traded stocks are valued at their closing price on the date of death. 
C) Stocks traded on a stock exchange are valued at the closing price for the date of death unless the alternate valuation date is elected. 
D) All of the above are false. 
A) The unified credit is the only credit common to both the gift and estate tax computation. 
B) For estate tax purposes, publicly traded stocks are valued at their closing price on the date of death. 
C) Stocks traded on a stock exchange are valued at the closing price for the date of death unless the alternate valuation date is elected. 
D) All of the above are false.

On March 1, Sue transfers stock worth $20,000 to Frank. How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

Identify which of the following statements is true.

A qualified disclaimer is a valuable estate planning tool because

Identify which of the following statements is true.

Proceeds of a life insurance policy payable to the estate's executor, as the estate's representative, are

Identify which of the following statements is true.

The estate tax is a wealth transfer tax.

An executor can value each asset in an estate at the lower of its FMV at death or the alternate valuation date.

Briefly discuss how inter vivos gifts can be used to reduce the size of the estate tax base.

Identify which of the following statements is true.

Identify which of the following statements is false.

The value of stock that is not publicly traded may be determined by considering

Identify which of the following statements is true.

Which of the following credits is available for estate tax purposes?

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters

Exam 13: The Estate Tax

On March 1, Sue transfers stock worth $20,000 to Frank. How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

Identify which of the following statements is true.

A qualified disclaimer is a valuable estate planning tool because

Identify which of the following statements is true.

Proceeds of a life insurance policy payable to the estate's executor, as the estate's representative, are

Identify which of the following statements is true.

The estate tax is a wealth transfer tax.

An executor can value each asset in an estate at the lower of its FMV at death or the alternate valuation date.

Briefly discuss how inter vivos gifts can be used to reduce the size of the estate tax base.

Identify which of the following statements is true.

Identify which of the following statements is false.

The value of stock that is not publicly traded may be determined by considering

Identify which of the following statements is true.

Which of the following credits is available for estate tax purposes?

Identify which of the following statements is true.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters