Question 1

The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1986 taxable gifts if the decedent made gifts in 1981.

Accepted Answer

A) True 
 B)False

Question 2

Appraisal methods used to value real estate for estate tax purposes may include

Accepted Answer

A) comparable sales. 
B) reproduction cost. 
C) capitalization of earnings. 
D) all of the above 
A) comparable sales. 
B) reproduction cost. 
C) capitalization of earnings. 
D) all of the above

Question 3

Listed stocks are valued at their closing price on the date of death.

Accepted Answer

A) True 
 B)False

Question 4

When computing the federal estate tax liability in 2020, which of the following taxable estates (not tentative tax)would the unified credit for the current year eliminate all of the tax is

Accepted Answer

A) $15,555,800. 
B) $17,800,800. 
C) $11,580,000. 
D) $12,000,000. 
A) $15,555,800. 
B) $17,800,800. 
C) $11,580,000. 
D) $12,000,000.

Question 5

Which of the following circumstances would cause the gifted property to be included in the donor's gross estate? I. Donor retains a life estate in the gift property.
II) Donor retains the power to revoke or amend the gift.
III) Donor gives more than $14,000 to one donee in one year.
IV) Donor dies within three years of gifting land.

Accepted Answer

A) I, II and III 
B) I, II 
C) II, IV 
D) III, IV 
A) I, II and III 
B) I, II 
C) II, IV 
D) III, IV

Question 6

In 2016, Clara made taxable gifts of $2 million. This year, Clara dies with a taxable estate of $14 million. At the time of her death, the FMV of the property Clara gifted in 2016 is $8 million. What is the amount of the estate tax base?

Accepted Answer

$2,000,000

Question 7

Sasha gives $1,000,000 to her granddaughter. Sasha has used all of her unified credit and is in the 40% marginal gift tax bracket; ignore the annual exclusion and exemption. What is the amount of her tax on this transfer?

Accepted Answer

A) $450,000 
B) $400,000 
C) $1,450,000 
D) $652,500 
A) $450,000 
B) $400,000 
C) $1,450,000 
D) $652,500

Question 8

Identify which of the following statements is false.

Accepted Answer

A) Special use valuation is available for farmland to help alleviate liquidity problems. 
B) The transferee is liable for the generation-skipping transfer tax (GSTT)in the case of a direct skip. 
C) The generation-skipping transfer tax (GSTT)is imposed to assure that some form of transfer taxation is imposed once a generation. 
D) A direct skip skips one or more generations. 
A) Special use valuation is available for farmland to help alleviate liquidity problems. 
B) The transferee is liable for the generation-skipping transfer tax (GSTT)in the case of a direct skip. 
C) The generation-skipping transfer tax (GSTT)is imposed to assure that some form of transfer taxation is imposed once a generation. 
D) A direct skip skips one or more generations.

Question 9

The alternate valuation date can be elected for estate tax purposes only if the election

Accepted Answer

A) increases the value of the gross estate. 
B) decreases the value of the gross estate. 
C) decreases the estate tax liability (after reduction for tax credits). 
D) Both B and C are required. 
A) increases the value of the gross estate. 
B) decreases the value of the gross estate. 
C) decreases the estate tax liability (after reduction for tax credits). 
D) Both B and C are required.

Question 10

On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2019. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Accepted Answer

A) six months 
B) one year 
C) three years 
D) No minimum time period exists. 
A) six months 
B) one year 
C) three years 
D) No minimum time period exists.

Question 11

Ray died on March 4. His estate includes some stock and a parcel of land. The stock is still owned by the estate on September 4, but the land is sold on August 30. If Ray's executor elects the alternate valuation date, what values would be used for estate tax purposes for the stock and the land?

Accepted Answer

Stock value on Septe

Question 12

A special power of appointment exists if the holder can exercise the power in favor of himself or herself, his or her creditors, or the creditors of his or her estate.

Accepted Answer

A) True 
 B)False

Question 13

Mary Johnson dies early in the current year. All her property passes subject to her will, which states that all of her property is to go to a QTIP trust for Dan for life with the remainder to their children. Mary's gross estate is about $11 million, and her Sec. 2053 deductions are very small. Dan, who is in poor health, already owns about $6 million of property. What tax issues should Dan Johnson and the estate's executor consider with respect to the property that passes to the QTIP trust?

Accepted Answer

• The issue is what marital deduction (i

Question 14

The probate estate includes property that passes by will or an intestacy statute and does not include property that passes due to a beneficiary designation.

Accepted Answer

A) True 
 B)False

Question 15

Karen died on May 5 of the current year. Her executor elects date-of-death valuation. Karen's gross estate possibly includes the following items:
• Joint checking account (with her husband), which has a balance of $10,000. Her husband did not contribute to the account.
• Joint savings account (with her daughter), which has a balance of $50,000. Her daughter did not contribute to the account.
• Life insurance policy on the life of Karen, having a face value of $400,000. The cost of a comparable policy immediately before Karen's death is $150,000. Karen's estate is the beneficiary.
• Life insurance policy on the life of Karen's daughter, having a face value of $100,000 with an interpolated terminal reserve immediately before Karen's death of $30,000.
Unexpired premiums are $5,000. Karen is the beneficiary. How much, if any, of these items are included in Karen's estate?

Accepted Answer

$490,000 = $5,000 (one-half of joint che

Question 16

Identify which of the following statements is true.

Accepted Answer

A) If spouses are the only joint owners, only one-half of the value of the jointly owned property is included in the gross estate, regardless of the relative amount of consideration provided by either spouse. 
B) Special powers of appointment give the power holder less restricted powers than a general power of appointment. 
C) The gross estate does not include the value of life insurance policies on the decedent if the proceeds are receivable by the executor or for the benefit of the estate. 
D) All of the above are false. 
A) If spouses are the only joint owners, only one-half of the value of the jointly owned property is included in the gross estate, regardless of the relative amount of consideration provided by either spouse. 
B) Special powers of appointment give the power holder less restricted powers than a general power of appointment. 
C) The gross estate does not include the value of life insurance policies on the decedent if the proceeds are receivable by the executor or for the benefit of the estate. 
D) All of the above are false.

Question 17

Lou dies on April 12, 2018. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2020. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

Accepted Answer

A) $350,000 
B) $280,000 
C) $210,000 
D) $140,000 
A) $350,000 
B) $280,000 
C) $210,000 
D) $140,000

Question 18

A stock redemption to pay death taxes under Sec. 303 is generally treated as

Accepted Answer

A) a sale or exchange of property. 
B) a dividend. 
C) a return of capital. 
D) ordinary income. 
A) a sale or exchange of property. 
B) a dividend. 
C) a return of capital. 
D) ordinary income.

Question 19

Identify which of the following statements is false.

Accepted Answer

A) Life insurance can help provide liquidity for paying estate taxes. 
B) Life insurance has the potential for large appreciation. 
C) The insured does not have to be the owner of the policy. 
D) Life insurance is always part of the estate of the insured. 
A) Life insurance can help provide liquidity for paying estate taxes. 
B) Life insurance has the potential for large appreciation. 
C) The insured does not have to be the owner of the policy. 
D) Life insurance is always part of the estate of the insured.

Question 20

One of the major problems facing executors in managing the estate is

Accepted Answer

A) identifying deductions. 
B) liquidity. 
C) the unified credit computation. 
D) determining the method to value assets. 
A) identifying deductions. 
B) liquidity. 
C) the unified credit computation. 
D) determining the method to value assets.

The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1986 taxable gifts if the decedent made gifts in 1981.

Appraisal methods used to value real estate for estate tax purposes may include

Listed stocks are valued at their closing price on the date of death.

When computing the federal estate tax liability in 2020, which of the following taxable estates (not tentative tax)would the unified credit for the current year eliminate all of the tax is

In 2016, Clara made taxable gifts of $2 million. This year, Clara dies with a taxable estate of $14 million. At the time of her death, the FMV of the property Clara gifted in 2016 is $8 million. What is the amount of the estate tax base?

Sasha gives $1,000,000 to her granddaughter. Sasha has used all of her unified credit and is in the 40% marginal gift tax bracket; ignore the annual exclusion and exemption. What is the amount of her tax on this transfer?

Identify which of the following statements is false.

The alternate valuation date can be elected for estate tax purposes only if the election

On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2019. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Ray died on March 4. His estate includes some stock and a parcel of land. The stock is still owned by the estate on September 4, but the land is sold on August 30. If Ray's executor elects the alternate valuation date, what values would be used for estate tax purposes for the stock and the land?

A special power of appointment exists if the holder can exercise the power in favor of himself or herself, his or her creditors, or the creditors of his or her estate.

The probate estate includes property that passes by will or an intestacy statute and does not include property that passes due to a beneficiary designation.

Identify which of the following statements is true.

Lou dies on April 12, 2018. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2020. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

A stock redemption to pay death taxes under Sec. 303 is generally treated as

Identify which of the following statements is false.

One of the major problems facing executors in managing the estate is

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

The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1986 taxable gifts if the decedent made gifts in 1981.

Appraisal methods used to value real estate for estate tax purposes may include

Listed stocks are valued at their closing price on the date of death.

When computing the federal estate tax liability in 2020, which of the following taxable estates (not tentative tax)would the unified credit for the current year eliminate all of the tax is

In 2016, Clara made taxable gifts of $2 million. This year, Clara dies with a taxable estate of $14 million. At the time of her death, the FMV of the property Clara gifted in 2016 is $8 million. What is the amount of the estate tax base?

Sasha gives $1,000,000 to her granddaughter. Sasha has used all of her unified credit and is in the 40% marginal gift tax bracket; ignore the annual exclusion and exemption. What is the amount of her tax on this transfer?

Identify which of the following statements is false.

The alternate valuation date can be elected for estate tax purposes only if the election

On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2019. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Ray died on March 4. His estate includes some stock and a parcel of land. The stock is still owned by the estate on September 4, but the land is sold on August 30. If Ray's executor elects the alternate valuation date, what values would be used for estate tax purposes for the stock and the land?

A special power of appointment exists if the holder can exercise the power in favor of himself or herself, his or her creditors, or the creditors of his or her estate.

The probate estate includes property that passes by will or an intestacy statute and does not include property that passes due to a beneficiary designation.

Identify which of the following statements is true.

Lou dies on April 12, 2018. All of Lou's property passed to Paula, his daughter. Paula dies on January 15, 2020. Both Lou's and Paula's estates pay federal estate taxes. Lou's estate tax was $350,000. How much can Paula's estate claim for a credit for tax on prior transfers?

A stock redemption to pay death taxes under Sec. 303 is generally treated as

Identify which of the following statements is false.

One of the major problems facing executors in managing the estate is

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