Question 1

What are the requirements for classifying a transaction as a transfer of a qualified terminable interest property (QTIP)?

Accepted Answer

The requirements for a qualified termina

Question 2

Hu makes a gift of his home to a local homeless shelter (a 501(c)(3)charity). Hu will retain his home for 10 years, after which the homeless shelter will take possession. The value of Hu's 10-year interest is $30,000 and the remainder interest is valued at $120,000. Which of the following statements is correct?

Accepted Answer

A) Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year. 
B) Hu is allowed an exclusion of $15,000 on his gift of $120,000 to the charity. 
C) Hu is not allowed to deduct the contribution until the charity takes possession in 10 years. 
D) Hu has a charitable contribution deduction of $120,000 on his current gift tax return. 
A) Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year. 
B) Hu is allowed an exclusion of $15,000 on his gift of $120,000 to the charity. 
C) Hu is not allowed to deduct the contribution until the charity takes possession in 10 years. 
D) Hu has a charitable contribution deduction of $120,000 on his current gift tax return.

Question 3

Connie has some acreage that is valued at $1,500,000. Her daughter would like to build a home on it, but can only afford $500,000. Connie agrees to sell it to her daughter for $500,000. Is there any gift tax consequence as a result of this transaction?

Accepted Answer

Connie is considered to have made a gift

Question 4

On September 1, George transfers his entire ownership rights in a $250,000 life insurance policy on his own life to his sister, Sally. The policy's interpolated terminal reserve is $30,000 as of September 1. On July 1, George had paid the policy's $6,000 annual premium. What are the gift tax consequences, if any?

Accepted Answer

George is considered to have made a gift

Question 5

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

Accepted Answer

A) Martha has made a gift to Ned of $100. 
B) Ned has made a gift to Martha of $500. 
C) Martha has made a gift to Ned of $600. 
D) Martha has made a gift to Ned of $1,000. 
A) Martha has made a gift to Ned of $100. 
B) Ned has made a gift to Martha of $500. 
C) Martha has made a gift to Ned of $600. 
D) Martha has made a gift to Ned of $1,000.

Question 6

The computation of the gift tax liability for a current year

Accepted Answer

A) is made without reference to previous years. 
B) requires the use of current-year tax rates only. 
C) requires the use of different rates, depending on when the gifts were made. 
D) requires knowledge of the total gift taxes paid in previous years. 
A) is made without reference to previous years. 
B) requires the use of current-year tax rates only. 
C) requires the use of different rates, depending on when the gifts were made. 
D) requires knowledge of the total gift taxes paid in previous years.

Question 7

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

Accepted Answer

A) True 
 B)False

Question 8

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post-1976 transfers is reduced by

Accepted Answer

A) $0. 
B) $6,000. 
C) $15,000. 
D) $30,000. 
A) $0. 
B) $6,000. 
C) $15,000. 
D) $30,000.

Question 9

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

Accepted Answer

A) True 
 B)False

Question 10

Identify which of the following statements is false.

Accepted Answer

A) A power of appointment exists when a person transfers property and grants someone else the power to specify who eventually will receive the property. 
B) A person possesses a general power of appointment if the person has the power to appoint property to himself, his creditors, his estate, or the creditors of his estate. 
C) The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor. 
D) The donor must recognize as a gain the excess of the gift tax payable over the adjusted basis of the property. 
A) A power of appointment exists when a person transfers property and grants someone else the power to specify who eventually will receive the property. 
B) A person possesses a general power of appointment if the person has the power to appoint property to himself, his creditors, his estate, or the creditors of his estate. 
C) The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor. 
D) The donor must recognize as a gain the excess of the gift tax payable over the adjusted basis of the property.

Question 11

Identify which of the following statements is true.

Accepted Answer

A) Cash paid directly to a medical school for room and board is a "qualified transfer" and not subject to the gift tax. 
B) Transfers by an individual to a political party constitute a gift subject to the gift tax rules. 
C) A statutory exemption from the gift tax is available for property transfers between divorced individuals when the divorce occurs during a three-year period beginning one year before the transfer agreement is made. 
D) All of the above are false. 
A) Cash paid directly to a medical school for room and board is a "qualified transfer" and not subject to the gift tax. 
B) Transfers by an individual to a political party constitute a gift subject to the gift tax rules. 
C) A statutory exemption from the gift tax is available for property transfers between divorced individuals when the divorce occurs during a three-year period beginning one year before the transfer agreement is made. 
D) All of the above are false.

Question 12

Which of the following statements is true?

Accepted Answer

A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
B) If the donor retains the power to change the trust beneficiary, the gift is complete. 
C) Transfers to a revocable trust are completed gifts. 
D) All of the above are false. 
A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
B) If the donor retains the power to change the trust beneficiary, the gift is complete. 
C) Transfers to a revocable trust are completed gifts. 
D) All of the above are false.

Question 13

Which of the following situations requires that a gift tax return be filed?

Accepted Answer

A) George gives wife, Laura, a new car for her birthday. 
B) Yanisha makes gifts of $3,000 of present interest property to each of her nieces and nephews. 
C) Archie pays the hospital medical bills for his friend Paige. 
D) Ida purchases a beach home, listing Mark as a joint tenant. Mark provides no consideration for the home. 
A) George gives wife, Laura, a new car for her birthday. 
B) Yanisha makes gifts of $3,000 of present interest property to each of her nieces and nephews. 
C) Archie pays the hospital medical bills for his friend Paige. 
D) Ida purchases a beach home, listing Mark as a joint tenant. Mark provides no consideration for the home.

Question 14

In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total

Accepted Answer

A) $70,000. 
B) $59,000. 
C) $55,000. 
D) $25,000. 
A) $70,000. 
B) $59,000. 
C) $55,000. 
D) $25,000.

Question 15

Karen purchased a beach house for $300,000 and immediately titled it in the names of Karen and Kenny, as joint tenants with right of survivorship. Karen and Kenny are not married. Did a gift occur? If so, for what amount?

Accepted Answer

Yes, a gift of one-h

Question 16

Why are Crummey trusts popular for minors?

Accepted Answer

A) They are considered gifts of a future interest and allow the donor to take an exclusion. 
B) They are considered gifts of a present interest, permitting an annual gift tax exclusion. 
C) Crummey trusts require annual distributions to minors. 
D) Donors are only subject to the gift tax when funds are distributed from Crummey trusts. 
A) They are considered gifts of a future interest and allow the donor to take an exclusion. 
B) They are considered gifts of a present interest, permitting an annual gift tax exclusion. 
C) Crummey trusts require annual distributions to minors. 
D) Donors are only subject to the gift tax when funds are distributed from Crummey trusts.

Question 17

Yuli wants to help his adult grandson, Jerry, become a CPA. He pays all of Jerry's tuition this year, which totals $20,000. He also pays $9,000 for Jerry's room and board at school. Yuli makes the payments directly to the school. What are the gift tax consequences?

Accepted Answer

IRC Sec. 2503(c)exempts the direct payme

Question 18

Which of the following transfers is subject to the gift tax?

Accepted Answer

A) Matilda contributes $5,000 to a Senate candidate's political organization. 
B) Frank gives $30,000 to a lobbying group promoting stricter environmental regulations. 
C) Julia establishes a trust benefiting her nieces and nephews. Julia will determine the amount of any distributions made. 
D) Lance purchases land, titling it in the names of Lance and Sheryl, joint owners. 
A) Matilda contributes $5,000 to a Senate candidate's political organization. 
B) Frank gives $30,000 to a lobbying group promoting stricter environmental regulations. 
C) Julia establishes a trust benefiting her nieces and nephews. Julia will determine the amount of any distributions made. 
D) Lance purchases land, titling it in the names of Lance and Sheryl, joint owners.

Question 19

A qualified disclaimer must be made within nine months after (a)the day the property is transferred, or (b)the day the person receiving the property becomes age 21, whichever is later.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

Accepted Answer

A) Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. 
B) Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. 
C) Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year. 
D) Ellen reimburses her granddaughter $15,000 for her tuition at medical school. 
A) Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. 
B) Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. 
C) Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year. 
D) Ellen reimburses her granddaughter $15,000 for her tuition at medical school.

What are the requirements for classifying a transaction as a transfer of a qualified terminable interest property (QTIP)?

Connie has some acreage that is valued at $1,500,000. Her daughter would like to build a home on it, but can only afford $500,000. Connie agrees to sell it to her daughter for $500,000. Is there any gift tax consequence as a result of this transaction?

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

The computation of the gift tax liability for a current year

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post-1976 transfers is reduced by

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

Identify which of the following statements is false.

Identify which of the following statements is true.

Which of the following statements is true?

Which of the following situations requires that a gift tax return be filed?

In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total

Karen purchased a beach house for $300,000 and immediately titled it in the names of Karen and Kenny, as joint tenants with right of survivorship. Karen and Kenny are not married. Did a gift occur? If so, for what amount?

Why are Crummey trusts popular for minors?

Yuli wants to help his adult grandson, Jerry, become a CPA. He pays all of Jerry's tuition this year, which totals $20,000. He also pays $9,000 for Jerry's room and board at school. Yuli makes the payments directly to the school. What are the gift tax consequences?

Which of the following transfers is subject to the gift tax?

A qualified disclaimer must be made within nine months after (a)the day the property is transferred, or (b)the day the person receiving the property becomes age 21, whichever is later.

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

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 Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

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Exam 12: The Gift Tax

What are the requirements for classifying a transaction as a transfer of a qualified terminable interest property (QTIP)?

Connie has some acreage that is valued at $1,500,000. Her daughter would like to build a home on it, but can only afford $500,000. Connie agrees to sell it to her daughter for $500,000. Is there any gift tax consequence as a result of this transaction?

On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600.

The computation of the gift tax liability for a current year

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.

In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post-1976 transfers is reduced by

Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.

Identify which of the following statements is false.

Identify which of the following statements is true.

Which of the following statements is true?

Which of the following situations requires that a gift tax return be filed?

In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total

Karen purchased a beach house for $300,000 and immediately titled it in the names of Karen and Kenny, as joint tenants with right of survivorship. Karen and Kenny are not married. Did a gift occur? If so, for what amount?

Why are Crummey trusts popular for minors?

Yuli wants to help his adult grandson, Jerry, become a CPA. He pays all of Jerry's tuition this year, which totals $20,000. He also pays $9,000 for Jerry's room and board at school. Yuli makes the payments directly to the school. What are the gift tax consequences?

Which of the following transfers is subject to the gift tax?

A qualified disclaimer must be made within nine months after (a)the day the property is transferred, or (b)the day the person receiving the property becomes age 21, whichever is later.

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

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 Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters