Question 1

Roger makes a $1,000,000 cash gift on January 1 of the current year,and dies on February 1 of the current year.Roger's gift tax return is due

Accepted Answer

A) April 15 of the current year. 
B) December 31 of the current year. 
C) April 15 of the next year. 
D) nine months after his date of death. 
A) April 15 of the current year. 
B) December 31 of the current year. 
C) April 15 of the next year. 
D) nine months after his date of death.

Question 2

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets.Rachel,her estate,and her creditors cannot be beneficiaries or receive the trust assets.Rachel has a general power of appointment.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a completed gift?

Accepted Answer

A) Greta transfers $50,000 to a revocable trust benefiting her children Hans and Julio. 
B) Juan purchases a ski chalet using his own funds,but listing Penelope as a joint owner. 
C) Horatio transfers $60,000 to a bank account with Hazel.Hazel does not contribute any money to the account. 
D) Mike changes the beneficiary of his policy to Meredith. 
A) Greta transfers $50,000 to a revocable trust benefiting her children Hans and Julio. 
B) Juan purchases a ski chalet using his own funds,but listing Penelope as a joint owner. 
C) Horatio transfers $60,000 to a bank account with Hazel.Hazel does not contribute any money to the account. 
D) Mike changes the beneficiary of his policy to Meredith.

Question 4

A Crummey trust

Accepted Answer

A) provides the donor with the ability to retrieve the property. 
B) prohibits the beneficiary from withdrawing assets. 
C) allows the donor an annual exclusion for transfers. 
D) receives property that is not eligible for the annual exclusion. 
A) provides the donor with the ability to retrieve the property. 
B) prohibits the beneficiary from withdrawing assets. 
C) allows the donor an annual exclusion for transfers. 
D) receives property that is not eligible for the annual exclusion.

Question 5

Greg transfers property on August 8 of the current year with an adjusted basis of $40,000 and an FMV of $90,000 to his ex-wife as a property settlement that is part of their divorce agreement.The property settlement agreement and the divorce were both finalized on June 3 of the current year.Greg has made a gift of

Accepted Answer

A) $0. 
B) $40,000. 
C) $80,000. 
D) $90,000. 
A) $0. 
B) $40,000. 
C) $80,000. 
D) $90,000.

Question 6

Identify which of the following statements is true.

Accepted Answer

A) An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
B) A qualified disclaimer must be made within six months after (a)the day the property is transferred,or (b)the day the person receiving the property becomes age 21,whichever is later. 
C) One of the tests that a qualified disclaimer must meet is that it must be an irrevocable,unqualified,written refusal to accept property. 
D) All of the above are false. 
A) An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
B) A qualified disclaimer must be made within six months after (a)the day the property is transferred,or (b)the day the person receiving the property becomes age 21,whichever is later. 
C) One of the tests that a qualified disclaimer must meet is that it must be an irrevocable,unqualified,written refusal to accept property. 
D) All of the above are false.

Question 7

Contrast the Crummey trust with the Sec.2503(c)trust.

Accepted Answer

Contributions to both discretionary trus

Question 8

Which of the following statements is true?

Accepted Answer

A) If the donor does not pay the gift tax,the donee is personally liable for the tax. 
B) When a married couple elects gift splitting,each spouse is potentially liable for 50% of the gift tax. 
C) Gift tax returns are due March 15 in the year following the gift. 
D) Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension. 
A) If the donor does not pay the gift tax,the donee is personally liable for the tax. 
B) When a married couple elects gift splitting,each spouse is potentially liable for 50% of the gift tax. 
C) Gift tax returns are due March 15 in the year following the gift. 
D) Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension.

Question 9

On January 1,Jeff loans his friend Patrick $7,000 to buy a used car.Patrick signs a noninterest-bearing demand note.The applicable interest rate is 5%.Which of the following statements is correct?

Accepted Answer

A) Jeff has made a taxable gift to Patrick of $3,500. 
B) Jeff must report interest income of $3,500 from Patrick. 
C) Jeff has made a gift to Patrick that is not taxable since it is less than $11,000. 
D) Interest does not have to be imputed on the gift since the loan amount is less than $10,000 and does not have a tax avoidance motive. 
A) Jeff has made a taxable gift to Patrick of $3,500. 
B) Jeff must report interest income of $3,500 from Patrick. 
C) Jeff has made a gift to Patrick that is not taxable since it is less than $11,000. 
D) Interest does not have to be imputed on the gift since the loan amount is less than $10,000 and does not have a tax avoidance motive.

Question 10

Which of the following statements is true?

Accepted Answer

A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
B) If the donor retains the power to change the trust beneficiary,the gift is complete. 
C) Transfers to a revocable trust are completed gifts. 
D) All of the above are false. 
A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. 
B) If the donor retains the power to change the trust beneficiary,the gift is complete. 
C) Transfers to a revocable trust are completed gifts. 
D) All of the above are false.

Question 11

Identify which of the following statements is true.

Accepted Answer

A) A taxable gift may occur when property is sold in an arm's length transaction for less than its FMV. 
B) An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value. 
C) The statutory exemption from the gift tax for payments for medical care requires that the payment be made for a relative. 
D) All of the above are false. 
A) A taxable gift may occur when property is sold in an arm's length transaction for less than its FMV. 
B) An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value. 
C) The statutory exemption from the gift tax for payments for medical care requires that the payment be made for a relative. 
D) All of the above are false.

Question 12

Marilyn and Earl establish a trust benefiting their grandchild,Courtney,age 4.Courtney is to receive the accumulated income and corpus when she reaches age 30.In the year of the transfer,Courtney has a two-week period in which to request distributions.This trust is a

Accepted Answer

A) 2503(c)trust. 
B) Clifford trust. 
C) Crummey trust. 
D) none of the above 
A) 2503(c)trust. 
B) Clifford trust. 
C) Crummey trust. 
D) none of the above

Question 13

In the current year,Donna gives $50,000 cash and $30,000 of stock to Mike.She also gives $40,000 of tax-exempt bonds to Angela.Her husband,Andy,gives $200,000 of land to Angela.Assume the couple elects gift splitting for the current year.Donna's taxable gifts total

Accepted Answer

A) $132,000. 
B) $148,000. 
C) $110,000. 
D) $60,000. 
A) $132,000. 
B) $148,000. 
C) $110,000. 
D) $60,000.

Question 14

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000.From this transaction,Barbara is deemed to have made a gift (before the annual exclusion)of

Accepted Answer

A) $50,000. 
B) $170,000. 
C) $120,000. 
D) $0. 
A) $50,000. 
B) $170,000. 
C) $120,000. 
D) $0.

Question 15

On June 1,Sherri deposits $60,000 into a new joint bank account in the names of Sherri and John.Her friend John makes no deposits.On December 15th,John withdraws $25,000 from the joint account.What are the gift tax consequences,if any?

Accepted Answer

No gift arises upon the creation of the

Question 16

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

Accepted Answer

A) True 
 B)False

Question 17

A qualified disclaimer must be made within nine months after (a)the day the property is transferred,or (b)the day the person receiving the property becomes age 21,whichever is later.

Accepted Answer

A) True 
 B)False

Question 18

Discuss the ways in which the estate and gift tax system is a unified system.

Accepted Answer

The same tax rates apply for both gift a

Question 19

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen.No gift tax was paid on the transfer.Carmen then sold the stock for $9,000.The gain or loss Carmen will recognize on the sale is

Accepted Answer

A) $2,000 gain. 
B) $1,000 gain. 
C) $1,000 loss. 
D) none of the above 
A) $2,000 gain. 
B) $1,000 gain. 
C) $1,000 loss. 
D) none of the above

Question 20

Why are Crummey trusts popular for minors?

Accepted Answer

A) They are considered gifts of a future interest and allow the donor to take an exclusion. 
B) They are considered gifts of a present interest,permitting an annual gift tax exclusion. 
C) Crummey trusts require annual distributions to minors. 
D) Donors are only subject to the gift tax when funds are distributed from Crummey trusts. 
A) They are considered gifts of a future interest and allow the donor to take an exclusion. 
B) They are considered gifts of a present interest,permitting an annual gift tax exclusion. 
C) Crummey trusts require annual distributions to minors. 
D) Donors are only subject to the gift tax when funds are distributed from Crummey trusts.

Roger makes a $1,000,000 cash gift on January 1 of the current year,and dies on February 1 of the current year.Roger's gift tax return is due

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets.Rachel,her estate,and her creditors cannot be beneficiaries or receive the trust assets.Rachel has a general power of appointment.

Which of the following is a completed gift?

A Crummey trust

Identify which of the following statements is true.

Contrast the Crummey trust with the Sec.2503(c)trust.

Which of the following statements is true?

On January 1,Jeff loans his friend Patrick $7,000 to buy a used car.Patrick signs a noninterest-bearing demand note.The applicable interest rate is 5%.Which of the following statements is correct?

Which of the following statements is true?

Identify which of the following statements is true.

Marilyn and Earl establish a trust benefiting their grandchild,Courtney,age 4.Courtney is to receive the accumulated income and corpus when she reaches age 30.In the year of the transfer,Courtney has a two-week period in which to request distributions.This trust is a

In the current year,Donna gives $50,000 cash and $30,000 of stock to Mike.She also gives $40,000 of tax-exempt bonds to Angela.Her husband,Andy,gives $200,000 of land to Angela.Assume the couple elects gift splitting for the current year.Donna's taxable gifts total

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000.From this transaction,Barbara is deemed to have made a gift (before the annual exclusion)of

On June 1,Sherri deposits $60,000 into a new joint bank account in the names of Sherri and John.Her friend John makes no deposits.On December 15th,John withdraws $25,000 from the joint account.What are the gift tax consequences,if any?

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

A qualified disclaimer must be made within nine months after (a)the day the property is transferred,or (b)the day the person receiving the property becomes age 21,whichever is later.

Discuss the ways in which the estate and gift tax system is a unified system.

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen.No gift tax was paid on the transfer.Carmen then sold the stock for $9,000.The gain or loss Carmen will recognize on the sale is

Why are Crummey trusts popular for minors?

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Exam 12: The Gift Tax

Roger makes a $1,000,000 cash gift on January 1 of the current year,and dies on February 1 of the current year.Roger's gift tax return is due

Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets.Rachel,her estate,and her creditors cannot be beneficiaries or receive the trust assets.Rachel has a general power of appointment.

Which of the following is a completed gift?

A Crummey trust

Identify which of the following statements is true.

Contrast the Crummey trust with the Sec.2503(c)trust.

Which of the following statements is true?

On January 1,Jeff loans his friend Patrick $7,000 to buy a used car.Patrick signs a noninterest-bearing demand note.The applicable interest rate is 5%.Which of the following statements is correct?

Which of the following statements is true?

Identify which of the following statements is true.

Marilyn and Earl establish a trust benefiting their grandchild,Courtney,age 4.Courtney is to receive the accumulated income and corpus when she reaches age 30.In the year of the transfer,Courtney has a two-week period in which to request distributions.This trust is a

In the current year,Donna gives $50,000 cash and $30,000 of stock to Mike.She also gives $40,000 of tax-exempt bonds to Angela.Her husband,Andy,gives $200,000 of land to Angela.Assume the couple elects gift splitting for the current year.Donna's taxable gifts total

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000.From this transaction,Barbara is deemed to have made a gift (before the annual exclusion)of

On June 1,Sherri deposits $60,000 into a new joint bank account in the names of Sherri and John.Her friend John makes no deposits.On December 15th,John withdraws $25,000 from the joint account.What are the gift tax consequences,if any?

The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.

A qualified disclaimer must be made within nine months after (a)the day the property is transferred,or (b)the day the person receiving the property becomes age 21,whichever is later.

Discuss the ways in which the estate and gift tax system is a unified system.

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen.No gift tax was paid on the transfer.Carmen then sold the stock for $9,000.The gain or loss Carmen will recognize on the sale is

Why are Crummey trusts popular for minors?

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 Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Us Taxation of Foreign-Related Transactions

Filters