Exam 14: Transfer Taxes and Wealth Planning

The gross estate always includes the value of half of any real property owned by a decedent and another person in joint tenancy with the right of survivorship.

This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash.At Christmas,Samantha gave each of her three nephews Christmas gifts of an additional $5,000 in cash.What is the amount of the taxable gifts,if any,made by Samantha this year?

Which of the following is a true statement?

At his death,Trevor had a probate estate consisting of $4 million of property.Which of the following is a true statement about Trevor's estate or estate tax?

Eric has $5 million of property that he wants to leave to his four children.He is considering making a current gift of the property (rather than leaving the property to pass through his will).Eric has made many prior taxable gifts and additional taxable transfers will be subject to the highest transfer tax rate.Determine how much estate tax Eric will save if he gifts the property now and survives at least three years,during which time the property appreciates to $5.5 million? Ignore the time value of money in your calculation.(Use Exhibit 14-1)

At his death,Titus had a gross estate consisting of $6 million of property.Which of the following is a true statement about Titus' estate or estate tax?

Which of the following is a true statement?

The gross estate includes the value of half of real property owned by a decedent and spouse in joint tenancy with the right of survivorship.

This year Nicholas earned $500,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh.Has Nicholas made a taxable gift to Nevaeh and,if so,in what amount?

An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

Angel and Abigail are married and live in a common law state.Angel and Abigail own a parcel of realty as joint tenants with the right of survivorship.In addition,Abigail owns another parcel of realty in her name alone.If Abigail should die when the jointly-owned realty is worth $1 million and her own parcel of realty is worth $1.5 million,what is the total value of realty that would be included in Abigail's gross estate?

At her death,Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship.Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000.What amount,if any,is included in Serena's gross estate?

This year Evelyn created an irrevocable trust to provide for Ed,her 32-year-old nephew,and Ed's family.Evelyn transferred $150,000 to the trust and named a bank as the trustee.The trust was directed to pay income to Ed until he reaches age 35 (three years from now),and at that time the trust is to be terminated and the corpus is to be distributed to Ed's two children (or their estates).Determine the amount,if any,of the taxable gift.The relevant interest rate is 6 percent.

A trust is a legal entity whose purpose is to hold and administer property for the benefit of beneficiaries.

Only complete gifts are subject to the Federal gift tax.

Which of the following is a true statement about the Federal gift tax return (Form 709)?

Which of the following is a true statement?

Ethan owned a vacation home at the time of his death.Which of the following is a true statement if Ethan was married to Emma and resided in a common law state at the time of his death?

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?

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.