Question 1

The tax base for the transfer tax is __________. ​

Accepted Answer

A) fair market value 
B) book value 
C) tax credit value 
D) net realized value 
A) fair market value 
B) book value 
C) tax credit value 
D) net realized value

Question 2

When the first spouse dies,then any unused applicable exclusion is lost and cannot be used.

Accepted Answer

A) True 
 B)False

Question 3

The transfer of an estate (after death)by an individual to the _____ of the individual will result in the most favorable tax treatments.

Accepted Answer

A) children 
B) spouse 
C) parents 
D) employer 
E) siblings 
A) children 
B) spouse 
C) parents 
D) employer 
E) siblings

Question 4

If the ownership of a closely held company is less than 50 percent of the stock,then the ownership is termed as a __________. ​

Accepted Answer

A) minority interest 
B) majority interest 
C) marketable asset 
D) block asset 
A) minority interest 
B) majority interest 
C) marketable asset 
D) block asset

Question 5

Jane and Arthur Patrikson are happy that their daughter is graduating from high school.They gift their daughter $28,000,with $18,000 being paid out of Mr.Patrikson's account and the remaining from Mrs.Patrikson's account.What will be the gift tax payable by the Patriksons on account of the above transaction?

Accepted Answer

A) $2,800 
B) $1,800 
C) $1,000 
D) $400 
E) $0 
A) $2,800 
B) $1,800 
C) $1,000 
D) $400 
E) $0

Question 6

A letter of last instructions is:

Accepted Answer

A) a legal document that authorizes another person to take over someone's financial affairs and act on his or her behalf. 
B) a document that precisely states the treatments a person wants if he or she becomes terminally ill. 
C) a written power of attorney authorizing an individual to make health care decisions on behalf of the principal when the principal is unable to make such decisions. 
D) an informal memorandum that is separate from a will and contains suggestions or recommendations for carrying out a decedent's wishes. 
E) a personal statement left for family,friends,and community that shares your values,blessings,life's lessons,and hopes and dreams for the future. 
A) a legal document that authorizes another person to take over someone's financial affairs and act on his or her behalf. 
B) a document that precisely states the treatments a person wants if he or she becomes terminally ill. 
C) a written power of attorney authorizing an individual to make health care decisions on behalf of the principal when the principal is unable to make such decisions. 
D) an informal memorandum that is separate from a will and contains suggestions or recommendations for carrying out a decedent's wishes. 
E) a personal statement left for family,friends,and community that shares your values,blessings,life's lessons,and hopes and dreams for the future.

Question 7

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Accepted Answer

A) crummey 
B) credit shelter 
C) charitable lead 
D) special needs 
E) charitable remainder 
A) crummey 
B) credit shelter 
C) charitable lead 
D) special needs 
E) charitable remainder

Question 8

Liquidity is important in an estate to pay for death costs and possible taxes.

Accepted Answer

A) True 
 B)False

Question 9

In 2015,James gave his son John a $5,000,000 term life insurance policy taken on James' life.At the time of the gift,James was in good health,and the value of the term insurance policy for gift tax purposes was less than the $14,000 annual exclusion amount.However,James died in the year 2016.Which of the following statements is true?

Accepted Answer

A) In 2016,the $5,000,000 gift will be included in James' gross estate for estate tax purposes. 
B) In 2016,the $5,000,000 payout will not be included in James' gross estate for estate tax purposes as he had outlived the transfer by more than one year. 
C) James will get an annual exclusion of $50,000 i.e.1 percent of the gift amount in 2016. 
D) In 2016,James will be eligible for a unified tax credit of $500,000,i.e.10 percent of the gift amount,as he has outlived the transfer by more than one year. 
E) James cannot avail the charitable deduction in 2016 as he did not outlive the transfer by more than one year. 
A) In 2016,the $5,000,000 gift will be included in James' gross estate for estate tax purposes. 
B) In 2016,the $5,000,000 payout will not be included in James' gross estate for estate tax purposes as he had outlived the transfer by more than one year. 
C) James will get an annual exclusion of $50,000 i.e.1 percent of the gift amount in 2016. 
D) In 2016,James will be eligible for a unified tax credit of $500,000,i.e.10 percent of the gift amount,as he has outlived the transfer by more than one year. 
E) James cannot avail the charitable deduction in 2016 as he did not outlive the transfer by more than one year.

Question 10

Which of the following is true about the portability of the unified transfer tax credit?

Accepted Answer

A) When the first spouse dies,then any unused applicable exclusion amount (AEA will carry over to the other spouse. 
B) When the first spouse dies,then any unused applicable exclusion amount will carry over to the government. 
C) When the first spouse dies and is left with an excess amount after using the applicable exclusion,then the excess amount will carry over to a trust. 
D) It is a method of reducing gift taxes with the consent of the other spouse in which the gift can be treated as if each had been given one-half of it. 
E) It is a method of transferring assets between spouses,either by gift or through estate. 
A) When the first spouse dies,then any unused applicable exclusion amount (AEA will carry over to the other spouse. 
B) When the first spouse dies,then any unused applicable exclusion amount will carry over to the government. 
C) When the first spouse dies and is left with an excess amount after using the applicable exclusion,then the excess amount will carry over to a trust. 
D) It is a method of reducing gift taxes with the consent of the other spouse in which the gift can be treated as if each had been given one-half of it. 
E) It is a method of transferring assets between spouses,either by gift or through estate.

Question 11

You could gift any number of people __________ per year without having to pay any gift taxes. ​

Accepted Answer

A) $36,000 
B) $14,000 
C) $25,000 
D) $5,000 
A) $36,000 
B) $14,000 
C) $25,000 
D) $5,000

Question 12

You could give an unlimited amount of assets to your __________ without incurring any gift taxes. ​

Accepted Answer

A) children 
B) spouse 
C) friends 
D) charity trust 
A) children 
B) spouse 
C) friends 
D) charity trust

Question 13

_____ would be a first-level death-related cost.

Accepted Answer

A) Funeral expenses 
B) Federal estate taxes 
C) Probate expenses 
D) Inheritance taxes 
E) Administrative costs 
A) Funeral expenses 
B) Federal estate taxes 
C) Probate expenses 
D) Inheritance taxes 
E) Administrative costs

Question 14

A document that precisely states the treatments a person wants if he or she becomes terminally ill is called a _____.

Accepted Answer

A) living will 
B) ethical will 
C) memorandum 
D) letter of instructions 
E) codicil 
A) living will 
B) ethical will 
C) memorandum 
D) letter of instructions 
E) codicil

Question 15

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate,but which provides no income or estate tax advantages is a(n)_____ trust.

Accepted Answer

A) revocable living 
B) ethical living 
C) testamentary 
D) charitable lead 
E) credit shelter 
A) revocable living 
B) ethical living 
C) testamentary 
D) charitable lead 
E) credit shelter

Question 16

Estate planning requires the knowledge of wills,trusts,and taxes.

Accepted Answer

A) True 
 B)False

Question 17

The unified tax credit can be applied against the __________. ​

Accepted Answer

A) total income of the beneficiary of a will 
B) tentative tax on the estate tax base 
C) adjusted gross estate 
D) total estate taxes 
A) total income of the beneficiary of a will 
B) tentative tax on the estate tax base 
C) adjusted gross estate 
D) total estate taxes

Question 18

The taxable estate is less than the adjusted gross estate.

Accepted Answer

A) True 
 B)False

Question 19

__________ is applied to reduce estate tax when a large amount of real estate is for sale in one area,the value will be reduced solely because of the efforts required to sell the asset. ​

Accepted Answer

A) Marketability discount 
B) Minority discount 
C) Blockage discount 
D) Property discount 
A) Marketability discount 
B) Minority discount 
C) Blockage discount 
D) Property discount

Question 20

People planning means providing sustenance and resources for family members by anticipating their future needs.

Accepted Answer

A) True 
 B)False

The tax base for the transfer tax is __________.

When the first spouse dies,then any unused applicable exclusion is lost and cannot be used.

The transfer of an estate (after death)by an individual to the _____ of the individual will result in the most favorable tax treatments.

If the ownership of a closely held company is less than 50 percent of the stock,then the ownership is termed as a __________.

A letter of last instructions is:

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Liquidity is important in an estate to pay for death costs and possible taxes.

Which of the following is true about the portability of the unified transfer tax credit?

You could gift any number of people __________ per year without having to pay any gift taxes.

You could give an unlimited amount of assets to your __________ without incurring any gift taxes.

_____ would be a first-level death-related cost.

A document that precisely states the treatments a person wants if he or she becomes terminally ill is called a _____.

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate,but which provides no income or estate tax advantages is a(n)_____ trust.

Estate planning requires the knowledge of wills,trusts,and taxes.

The unified tax credit can be applied against the __________.

The taxable estate is less than the adjusted gross estate.

__________ is applied to reduce estate tax when a large amount of real estate is for sale in one area,the value will be reduced solely because of the efforts required to sell the asset.

People planning means providing sustenance and resources for family members by anticipating their future needs.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Filters

Exam 15: Preserving Your Estate

The tax base for the transfer tax is __________. ​

When the first spouse dies,then any unused applicable exclusion is lost and cannot be used.

The transfer of an estate (after death)by an individual to the _____ of the individual will result in the most favorable tax treatments.

If the ownership of a closely held company is less than 50 percent of the stock,then the ownership is termed as a __________. ​

A letter of last instructions is:

A trust designed to help couples gain full use out of each spouse's applicable exclusion amount is the _____ trust.

Liquidity is important in an estate to pay for death costs and possible taxes.

Which of the following is true about the portability of the unified transfer tax credit?

You could gift any number of people __________ per year without having to pay any gift taxes. ​

You could give an unlimited amount of assets to your __________ without incurring any gift taxes. ​

_____ would be a first-level death-related cost.

A document that precisely states the treatments a person wants if he or she becomes terminally ill is called a _____.

A trust that provides for management continuity and income flow even after the grantor's death and allows assets to bypass probate,but which provides no income or estate tax advantages is a(n)_____ trust.

Estate planning requires the knowledge of wills,trusts,and taxes.

The unified tax credit can be applied against the __________. ​

The taxable estate is less than the adjusted gross estate.

__________ is applied to reduce estate tax when a large amount of real estate is for sale in one area,the value will be reduced solely because of the efforts required to sell the asset. ​

People planning means providing sustenance and resources for family members by anticipating their future needs.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Filters

The tax base for the transfer tax is __________.

If the ownership of a closely held company is less than 50 percent of the stock,then the ownership is termed as a __________.

You could gift any number of people __________ per year without having to pay any gift taxes.

You could give an unlimited amount of assets to your __________ without incurring any gift taxes.

The unified tax credit can be applied against the __________.

__________ is applied to reduce estate tax when a large amount of real estate is for sale in one area,the value will be reduced solely because of the efforts required to sell the asset.