Exam 13: The Estate Tax

On December 1,1976,Bart made a gift and claimed a $30,000 specific exemption.When Bart died in 2008,his tax base was $2,000,000.Assuming the maximum unified credit is $780,800,what is the credit available when computing Bart's estate tax is what?

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?

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?

The alternate valuation date is generally

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.

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

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

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

Which of the following is deductible in arriving at the amount of the taxable estate?

Administrative expenses are not deductible on the estate's income tax return.

In 2002,Gert made a $5,000,000 taxable gift.The 2002 gift tax on $5,000,000 was $2,275.800.Gert was entitled to a unified credit of $345,800,resulting in a gift tax of $1,193,000.The marginal tax rate in 2002 is 50%.Assume Gert dies in 2013 when the credit is $2,045.800 and the marginal rate is 40%,the tax on $5,000,000 would equal $1,945,800 before subtracting any credit.In arriving at Gert's estate tax liability,what is the amount subtracted for 1992 gift taxes paid?

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?

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

Identify which of the following statements is false.

Guy died this year.His estate includes a closely held business interest valued at $400,000 and other property valued at $675,000.Guy's allowable Sec.2053 and 2054 deductions total $75,000.Within three years of death,partly in hopes of qualifying his estate for the installment payment allowed under Sec.6166 treatment,Guy made gifts of listed securities of $350,000 (at 2002 valuations)and paid no gift tax on the gift.Is Guy's estate eligible for Sec.6166 treatment?

Brent,who died on January 10,owned 10 shares of Potts Corporation stock.The closest trading dates to January 10 are January 8 (two working days before the date of death)and January 11 (one working day after the date of death).On January 8,the stock traded at a high of 101 and a low of 97,while on January 11,the high was 90 and the low was 86.The date-of-death per-share value is

Identify which of the following statements is true.

Identify which of the following statements is true.

In 2001,Clara made taxable gifts of $2 million.This year,Clara dies with a taxable estate of $4 million.At the time of her death,the FMV of the property Clara gifted in 2001 is $8 million.What is the amount of the estate tax base?

In 2012,Paul transfers $1,000,000 to a trust benefiting his three children.As trustee,he has the power to determine the amount of distributions each year.Paul dies in the current year when the trust has a value of $1,200,000.How much of the trust's value is included in Paul's estate?