Question 1

Identify which of the following statements is true.

Accepted Answer

A)  The transferee is liable for the generation-skipping transfer tax (GSTT) in the case of a direct skip. 
B)  Special use valuation is available for farmland to help alleviate liquidity problems. 
C)  Qualified disclaimers are not available for estate planning purposes. 
D)  All of the above are false. 
A)  The transferee is liable for the generation-skipping transfer tax (GSTT) in the case of a direct skip. 
B)  Special use valuation is available for farmland to help alleviate liquidity problems. 
C)  Qualified disclaimers are not available for estate planning purposes. 
D)  All of the above are false. B

Question 2

Yoyo Corporation maintains a retirement plan for its employees to which it makes 70% of the contributions and the employees make 30%.Gary dies this year and is employed at the time of his death.Gary's spouse will receive an annuity valued at $600,000 from the retirement plan.How much of the annuity will be included in Gary's gross estate?

Accepted Answer

A)  $600,000 
B)  $420,000 
C)  $180,000 
D)  $0 
A)  $600,000 
B)  $420,000 
C)  $180,000 
D)  $0 A

Question 3

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

Accepted Answer

A) True 
 B)False  False

Question 4

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 5

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 6

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 7

Compare the tax treatment of administration expenses with that of the decedent's debts.

Accepted Answer

Administration expenses may be deducted

Question 8

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 9

Betty dies on February 20,2013.Her estate consisted of the following assets,all valued as of her date of death: Stock with a basis of $40,000 and a fair market value of $200,000
Home valued at $1,500,000 and a basis of $490,000
Cash of $70,000
Life insurance on Betty's life owned by her daughter with a $500,000 face value
What is Betty's gross estate?

Accepted Answer

A)  $600,000 
B)  $1,100,000 
C)  $1,770,000 
D)  $2,270,000 
A)  $600,000 
B)  $1,100,000 
C)  $1,770,000 
D)  $2,270,000

Question 10

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.

Question 11

On March 1,Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2011.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 12

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 13

Denise died April 1 and owned several bonds that paid interest March 31 and September 30.Also,she owned stock that paid dividends quarterly on March 31,June 30,September 30,and December 31.Denise's estate received the interest and dividends on the payment dates.What should be included in Denise's gross estate?

Accepted Answer

A)  all interest and dividends received in the year of death 
B)  only interest and dividends received prior to the date of death 
C)  only interest and dividends received after the date of death 
D)  none of the interest and dividends received 
A)  all interest and dividends received in the year of death 
B)  only interest and dividends received prior to the date of death 
C)  only interest and dividends received after the date of death 
D)  none of the interest and dividends received

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

The GSTT's (generation-skipping transfer tax)purpose is

Accepted Answer

A)  to impose a graduated transfer tax one time a generation. 
B)  to impose some form of transfer tax one time a generation. 
C)  to impose a graduated transfer tax every other generation. 
D)  to impose some form of transfer tax every other generation. 
A)  to impose a graduated transfer tax one time a generation. 
B)  to impose some form of transfer tax one time a generation. 
C)  to impose a graduated transfer tax every other generation. 
D)  to impose some form of transfer tax every other generation.

Question 17

In 2006,Roger gives stock valued at $100,000 to Martha.Roger and Martha are not related.In 2008,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 18

The estate tax is a wealth transfer tax.

Accepted Answer

A) True 
 B)False

Question 19

Donna died on June 1 of the current year.The executor considers the following information when preparing her estate tax return:
• In 1997,Donna transfers title to her personal residence to her son.The residence is worth $60,000 on the transfer date.Donna continued to live alone in the residence until her death.She did not pay any rent.At her death,the residence is worth $100,000.
• In 1998,Donna created an irrevocable trust and funded it with $300,000 of assets.Donna names a bank as trustee.According to the trust agreement,all the trust income is to be paid out annually for 25 years.The trustee,however,is to decide how much income to pay each year to Donna's son and daughter.Upon termination of the trust,the assets are to be distributed equally among her two children or their estates.The trust's assets are worth $320,000 when Donna dies.
• In 1998,Donna created a revocable trust with a bank named as trustee.She named her grandchild Joe as the beneficiary for life.Upon Joe's death,the property is to be distributed equally among Joe's descendants.The trust assets are worth $300,000 when Donna dies.How much would be included in Donna's gross estate?

Accepted Answer

$100,000 (residence)

Question 20

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.

Identify which of the following statements is true.

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

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 false.

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

Compare the tax treatment of administration expenses with that of the decedent's debts.

Identify which of the following statements is false.

Identify which of the following statements is true.

On March 1,Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2011.How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Identify which of the following statements is true.

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

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.

The GSTT's (generation-skipping transfer tax)purpose is

The estate tax is a wealth transfer tax.

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

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

US Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

US Taxation of Foreign-Related Transactions

Filters

Exam 13: The Estate Tax

Identify which of the following statements is true.

Taxpayers can avoid the estate tax by making gifts at least a year prior to death.

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 false.

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

Compare the tax treatment of administration expenses with that of the decedent's debts.

Identify which of the following statements is false.

Identify which of the following statements is true.

On March 1,Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2011.How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Identify which of the following statements is true.

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

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.

The GSTT's (generation-skipping transfer tax)purpose is

The estate tax is a wealth transfer tax.

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

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

US Corporations

The Gift Tax

Income Taxation of Trusts and Estates

Administrative Procedures

US Taxation of Foreign-Related Transactions

Filters