Question 1

Explain how shares of stock traded on a stock exchange are valued.What is the blockage rule?

Accepted Answer

Shares traded on a stock exchange are va

Question 2

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 3

List the various categories of estate tax deductions,and compare them with the categories of gift tax deductions.What differences exist?

Accepted Answer

Estate tax deductions are as follows: ma

Question 4

In 1997,Barry and Fred provide $20,000 and $60,000 of consideration,respectively,to purchase a beach house titled in both their names as joint tenants with right of survivorship.Barry dies in the current year and is survived by Fred.The beach house is valued at $100,000.What amount must be included in Barry's gross estate for the beach house?

Accepted Answer

× $100,000

Question 5

Joe dies late in 2011 and his estate is subject to an estate tax of $2 million.He leaves all of his assets to his daughter,Claudia.Claudia dies in early 2013.Which of the following statements is correct?

Accepted Answer

A)  Claudia's estate receives no credit or deduction for the tax paid by Joe's estate. 
B)  Claudia's estate receives a credit for $1,000,000 of Joe's estate tax. 
C)  Claudia's estate receives a credit for $2,000,000 of Joe's estate tax. 
D)  Claudia's estate receives a deduction for $2,000,000 of Joe's estate tax. 
A)  Claudia's estate receives no credit or deduction for the tax paid by Joe's estate. 
B)  Claudia's estate receives a credit for $1,000,000 of Joe's estate tax. 
C)  Claudia's estate receives a credit for $2,000,000 of Joe's estate tax. 
D)  Claudia's estate receives a deduction for $2,000,000 of Joe's estate tax.

Question 6

In February of the current year,Tom dies.Two years and nine months before the date of death,Tom made a gift of stock valued at $2 million.Gift taxes paid on the transfer by Tom were $435,000 after reduction for a $345,800 unified credit ($780,800 - $345,800).At the time of his death,the gifted stock was valued at $2.3 million.The amount included in Tom's gross estate from this transfer is

Accepted Answer

A)  $2,000,000. 
B)  $2,300,000. 
C)  $435,000. 
D)  none of the above 
A)  $2,000,000. 
B)  $2,300,000. 
C)  $435,000. 
D)  none of the above

Question 7

The payment date for estate taxes may be extended by the IRS for all of the following reasons except

Accepted Answer

A)  the estate includes a 40% interest in a closely held business. 
B)  the estate includes a relatively large remainder or reversionary interest. 
C)  the executor of the estate shows reasonable cause. 
D)  All are valid reasons. 
A)  the estate includes a 40% interest in a closely held business. 
B)  the estate includes a relatively large remainder or reversionary interest. 
C)  the executor of the estate shows reasonable cause. 
D)  All are valid reasons.

Question 8

Identify which of the following statements is true.

Accepted Answer

A)  The period for payment of estate taxes may be extended if the executor shows "reasonable cause" for not being able to pay some, or all, of the estate tax liability on the regular due date. 
B)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15-year period if elected. 
C)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until eight months after the interests of the other person(s) terminate. 
D)  All of the above are false. 
A)  The period for payment of estate taxes may be extended if the executor shows "reasonable cause" for not being able to pay some, or all, of the estate tax liability on the regular due date. 
B)  The estate tax on interests in certain closely held businesses may be paid in installments over a 15-year period if elected. 
C)  An executor may elect to postpone payment of the estate tax attributable to a remainder or reversionary interest until eight months after the interests of the other person(s) terminate. 
D)  All of the above are false.

Question 9

In 2001,Alejandro buys an annuity for $100,000 that will pay Alejandro an annual amount for life with survivor benefits to his wife.When Alejandro dies in the current year,a comparable contract would have cost $81,000.What amount is included in Alejandro's gross estate?

Accepted Answer

A)  $0 
B)  $81,000 
C)  $100,000 
D)  $181,000 
A)  $0 
B)  $81,000 
C)  $100,000 
D)  $181,000

Question 10

On March 1,Sue transfers stock worth $20,000 to Frank.How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

Accepted Answer

A)  six months 
B)  one year 
C)  three years 
D)  No minimum time period exists, but she must be alive at transfer of ownership. 
A)  six months 
B)  one year 
C)  three years 
D)  No minimum time period exists, but she must be alive at transfer of ownership.

Question 11

The estate tax return is due,ignoring extensions,3-1/2 months after the decedent's date of death.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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 14

A qualified disclaimer is a valuable estate planning tool because

Accepted Answer

A)  it establishes the value of the disclaimed assets. 
B)  it qualifies the assets for the alternative valuation date. 
C)  it is not treated as a gift made by the person who disclaims. 
D)  it allows the person making the disclaimer to determine the recipient. 
A)  it establishes the value of the disclaimed assets. 
B)  it qualifies the assets for the alternative valuation date. 
C)  it is not treated as a gift made by the person who disclaims. 
D)  it allows the person making the disclaimer to determine the recipient.

Question 15

In 2014,the unified credit enables an estate valued at $5.34 million or less to not be subject to the estate tax.

Accepted Answer

A) True 
 B)False

Question 16

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 17

In 2001,Polly and Fred,brother and sister,purchased a condominium at a golf resort.Polly contributed 60% of the $200,000 cost; Fred contributed 40%.Polly dies in the current year when the condominium has a $300,000 value.How much is included in Polly's estate?

Accepted Answer

A)  $120,000 
B)  $180,000 
C)  $200,000 
D)  $300,000 
A)  $120,000 
B)  $180,000 
C)  $200,000 
D)  $300,000

Question 18

Mary creates and funds a revocable trust.Mary names her son to receive the income for life and her grandson to receive the property upon the son's death.What are Mary's powers with respect to the trust,and how will the trust be treated in her estate?

Accepted Answer

Since the trust is revocable,M

Question 19

The alternate valuation date is generally

Accepted Answer

A)  3 months after the date of death. 
B)  6 months after the date of death. 
C)  9 months after the date of death. 
D)  12 months after the date of death. 
A)  3 months after the date of death. 
B)  6 months after the date of death. 
C)  9 months after the date of death. 
D)  12 months after the date of death.

Question 20

Four years ago,Roper transferred to his son ownership of a $100,000 life insurance policy that Roper purchased on his own life in 2000.The cash value of the policy on the transfer date was $25,000.Roper died on March 1st of this year.The amount included in Roper's gross estate due to the life insurance policy is

Accepted Answer

A)  $0. 
B)  $25,000. 
C)  $35,000. 
D)  $100,000. 
A)  $0. 
B)  $25,000. 
C)  $35,000. 
D)  $100,000.

Explain how shares of stock traded on a stock exchange are valued.What is the blockage rule?

Identify which of the following statements is true.

List the various categories of estate tax deductions,and compare them with the categories of gift tax deductions.What differences exist?

Joe dies late in 2011 and his estate is subject to an estate tax of $2 million.He leaves all of his assets to his daughter,Claudia.Claudia dies in early 2013.Which of the following statements is correct?

The payment date for estate taxes may be extended by the IRS for all of the following reasons except

Identify which of the following statements is true.

In 2001,Alejandro buys an annuity for $100,000 that will pay Alejandro an annual amount for life with survivor benefits to his wife.When Alejandro dies in the current year,a comparable contract would have cost $81,000.What amount is included in Alejandro's gross estate?

On March 1,Sue transfers stock worth $20,000 to Frank.How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

The estate tax return is due,ignoring extensions,3-1/2 months after the decedent's date of death.

Identify which of the following statements is false.

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

A qualified disclaimer is a valuable estate planning tool because

In 2014,the unified credit enables an estate valued at $5.34 million or less to not be subject to the estate tax.

In 2001,Polly and Fred,brother and sister,purchased a condominium at a golf resort.Polly contributed 60% of the $200,000 cost; Fred contributed 40%.Polly dies in the current year when the condominium has a $300,000 value.How much is included in Polly's estate?

Mary creates and funds a revocable trust.Mary names her son to receive the income for life and her grandson to receive the property upon the son's death.What are Mary's powers with respect to the trust,and how will the trust be treated in her estate?

The alternate valuation date is generally

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Exam 13: The Estate Tax

Explain how shares of stock traded on a stock exchange are valued.What is the blockage rule?

Identify which of the following statements is true.

List the various categories of estate tax deductions,and compare them with the categories of gift tax deductions.What differences exist?

Joe dies late in 2011 and his estate is subject to an estate tax of $2 million.He leaves all of his assets to his daughter,Claudia.Claudia dies in early 2013.Which of the following statements is correct?

The payment date for estate taxes may be extended by the IRS for all of the following reasons except

Identify which of the following statements is true.

In 2001,Alejandro buys an annuity for $100,000 that will pay Alejandro an annual amount for life with survivor benefits to his wife.When Alejandro dies in the current year,a comparable contract would have cost $81,000.What amount is included in Alejandro's gross estate?

On March 1,Sue transfers stock worth $20,000 to Frank.How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?

The estate tax return is due,ignoring extensions,3-1/2 months after the decedent's date of death.

Identify which of the following statements is false.

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

A qualified disclaimer is a valuable estate planning tool because

In 2014,the unified credit enables an estate valued at $5.34 million or less to not be subject to the estate tax.

In 2001,Polly and Fred,brother and sister,purchased a condominium at a golf resort.Polly contributed 60% of the $200,000 cost; Fred contributed 40%.Polly dies in the current year when the condominium has a $300,000 value.How much is included in Polly's estate?

Mary creates and funds a revocable trust.Mary names her son to receive the income for life and her grandson to receive the property upon the son's death.What are Mary's powers with respect to the trust,and how will the trust be treated in her estate?

The alternate valuation date is generally

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