Question 1

Which, if any, of the following is not a characteristic of the Federal estate tax?

Accepted Answer

A)  A foreign tax credit is available. 
B)  A credit for tax on prior transfers may be available. 
C)  Pre-1977 taxable gifts need to be considered. 
D)  A charitable deduction is available. 
E)  None of the above. 
A)  A foreign tax credit is available. 
B)  A credit for tax on prior transfers may be available. 
C)  Pre-1977 taxable gifts need to be considered. 
D)  A charitable deduction is available. 
E)  None of the above.

Question 2

In 2000, Dale and Andrea acquire real estate for $1,000,000, with Dale furnishing $400,000 of the purchase price and Andrea providing the balance. Title to the property is listed as: "Dale and Andrea, equal tenants in common." Dale dies first in 2011, when the real estate is worth $2,000,000.

Accepted Answer

The answer of In 2000, Dale and Andrea acquire real...

Question 3

Which of the following statements relating to the Federal gift tax is incorrect?

Accepted Answer

A)  The deemed paid credit allowed for a prior taxable gift cannot be less than the gift tax that was actually paid. 
B)  The issuance of an effective disclaimer by an heir will pass the property to another without being subject to the Federal gift tax. 
C)  The annual exclusion is not available for gifts of future interests. 
D)  Up to 5 years of annual exclusions can be available for gifts involving § 529 plans (qualified tuition programs). 
E)  None of the above. 
A)  The deemed paid credit allowed for a prior taxable gift cannot be less than the gift tax that was actually paid. 
B)  The issuance of an effective disclaimer by an heir will pass the property to another without being subject to the Federal gift tax. 
C)  The annual exclusion is not available for gifts of future interests. 
D)  Up to 5 years of annual exclusions can be available for gifts involving § 529 plans (qualified tuition programs). 
E)  None of the above.

Question 4

At the time of her death, Rita held a promissory note from a loan she had made to her son. Even if Rita's will forgives the loan, the note is included in her gross estate.

Accepted Answer

A) True 
 B)False

Question 5

Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes.

Accepted Answer

A) True 
 B)False

Question 6

Cary and Bo are husband and wife. Using their community funds, they create a trust, life estate to Bo, remainder to their children. Four years later, Bo predeceases Cary. Nothing as to this trust is included in Bo's gross estate.

Accepted Answer

A) True 
 B)False

Question 7

In which of the following situations has a gift occurred?

Accepted Answer

A)  Heidi creates a revocable trust, income payable to herself, remainder to her children. 
B)  Herman establishes a joint savings account with his sister. 
C)  After Herman's death, his sister withdraws the funds he placed in their joint savings account. 
D)  The day before their marriage, Eva gives Arlan $500,000 in securities. 
E)  None of the above. 
A)  Heidi creates a revocable trust, income payable to herself, remainder to her children. 
B)  Herman establishes a joint savings account with his sister. 
C)  After Herman's death, his sister withdraws the funds he placed in their joint savings account. 
D)  The day before their marriage, Eva gives Arlan $500,000 in securities. 
E)  None of the above.

Question 8

In which, if any, of the following independent situations can the alternate valuation date be elected? Value of Gross Estate Estate Tax Result
Date of Alternate Date of Alternate
Death Date Death Date

Accepted Answer

A)  $6,000,000 $6,100,000 $400,000 $390,000 
B)  $5,900,000 $5,800,000 $400,000 $380,000 
C)  $6,100,000 $6,000,000 $390,000 $400,000 
D)  $6,200,000 $6,300,000 $500,000 $490,000 
E)  None of the above 
A)  $6,000,000 $6,100,000 $400,000 $390,000 
B)  $5,900,000 $5,800,000 $400,000 $380,000 
C)  $6,100,000 $6,000,000 $390,000 $400,000 
D)  $6,200,000 $6,300,000 $500,000 $490,000 
E)  None of the above

Question 9

A transfer in trust in which the trustee has the power to accumulate income is not a gift of a future interest if the trustee never exercises the power.

Accepted Answer

A) True 
 B)False

Question 10

In 1985, Drew creates a trust with $1,000,000 of securities. Under the terms of the trust, Paula (Drew's wife) is granted a life estate with remainder to their children. Drew makes a QTIP election as to the trust. Drew dies in 1992 when the trust is worth $1,500,000, and Paula dies in 2011 when the trust is worth $2,000,000. Which, if any, of the following is a correct statement?

Accepted Answer

A)  The trust is included in Drew's gross estate when he dies in 1992. 
B)  None of the trust is included in Paula's gross estate when she dies in 2011. 
C)  Drew gets a marital deduction in 1985. 
D)  Only $1,000,000 of the value of the trust is included in Paula's gross estate when she dies in 2011. 
E)  None of the above. 
A)  The trust is included in Drew's gross estate when he dies in 1992. 
B)  None of the trust is included in Paula's gross estate when she dies in 2011. 
C)  Drew gets a marital deduction in 1985. 
D)  Only $1,000,000 of the value of the trust is included in Paula's gross estate when she dies in 2011. 
E)  None of the above.

Question 11

The current $5 million exemption equivalent is not permanent but is scheduled to expire after 2012.

Accepted Answer

A) True 
 B)False

Question 12

The U.S. has death tax conventions (i.e., treaties) with most of the countries of the world.

Accepted Answer

A) True 
 B)False

Question 13

June made taxable gifts as follows: $400,000 in 1973, $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2011, June dies leaving a taxable estate of $4,000,000. June's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Accepted Answer

A)  $4,000,000. 
B)  $4,500,000. 
C)  $5,300,000. 
D)  $5,500,000. 
E)  None of the above. 
A)  $4,000,000. 
B)  $4,500,000. 
C)  $5,300,000. 
D)  $5,500,000. 
E)  None of the above.

Question 14

Iris dies intestate (i.e., without a will). All of her property passes to her heirs in accordance with the order of distribution prescribed under Federal law.

Accepted Answer

A) True 
 B)False

Question 15

Although qualified tuition plans under § 529 are treated favorably for gift tax purposes, such plans are subject to estate tax consequences upon the grantor's death.

Accepted Answer

A) True 
 B)False

Question 16

The Federal gift and estate taxes were restructured in 1976 into the unified transfer tax. The objective of the change was to eliminate the tax difference between transfers during life (gift tax) and at death (estate tax). Does this uniformity of treatment currently exist? In this regard, comment on the following differences between the two taxes.

Accepted Answer

The answer of The Federal gift and estate taxes were...

Question 17

Lyle and Beatrice are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Beatrice, joint tenants with right of survivorship." If Lyle dies first, all of the land is included in his gross estate.

Accepted Answer

A) True 
 B)False

Question 18

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

Accepted Answer

A) True 
 B)False

Question 19

In community property states, all property acquired after marriage by either spouse is community property.

Accepted Answer

A) True 
 B)False

Question 20

At one point, the tax rates applicable to transfers by gift were lower than those applying to transfers by death.

Accepted Answer

A) True 
 B)False

Which, if any, of the following is not a characteristic of the Federal estate tax?

In 2000, Dale and Andrea acquire real estate for $1,000,000, with Dale furnishing $400,000 of the purchase price and Andrea providing the balance. Title to the property is listed as: "Dale and Andrea, equal tenants in common." Dale dies first in 2011, when the real estate is worth $2,000,000.

Which of the following statements relating to the Federal gift tax is incorrect?

At the time of her death, Rita held a promissory note from a loan she had made to her son. Even if Rita's will forgives the loan, the note is included in her gross estate.

Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes.

Cary and Bo are husband and wife. Using their community funds, they create a trust, life estate to Bo, remainder to their children. Four years later, Bo predeceases Cary. Nothing as to this trust is included in Bo's gross estate.

In which of the following situations has a gift occurred?

In which, if any, of the following independent situations can the alternate valuation date be elected? Value of Gross Estate Estate Tax Result Date of Alternate Date of Alternate Death Date Death Date

A transfer in trust in which the trustee has the power to accumulate income is not a gift of a future interest if the trustee never exercises the power.

The current $5 million exemption equivalent is not permanent but is scheduled to expire after 2012.

The U.S. has death tax conventions (i.e., treaties) with most of the countries of the world.

June made taxable gifts as follows: $400,000 in 1973, $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2011, June dies leaving a taxable estate of $4,000,000. June's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Iris dies intestate (i.e., without a will). All of her property passes to her heirs in accordance with the order of distribution prescribed under Federal law.

Although qualified tuition plans under § 529 are treated favorably for gift tax purposes, such plans are subject to estate tax consequences upon the grantor's death.

Lyle and Beatrice are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Beatrice, joint tenants with right of survivorship." If Lyle dies first, all of the land is included in his gross estate.

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

In community property states, all property acquired after marriage by either spouse is community property.

At one point, the tax rates applicable to transfers by gift were lower than those applying to transfers by death.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S: Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

Family Tax Planning

Income Taxation of Trusts and Estates

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Exam 18: The Federal Gift and Estate Taxes

Which, if any, of the following is not a characteristic of the Federal estate tax?

In 2000, Dale and Andrea acquire real estate for $1,000,000, with Dale furnishing $400,000 of the purchase price and Andrea providing the balance. Title to the property is listed as: "Dale and Andrea, equal tenants in common." Dale dies first in 2011, when the real estate is worth $2,000,000.

Which of the following statements relating to the Federal gift tax is incorrect?

At the time of her death, Rita held a promissory note from a loan she had made to her son. Even if Rita's will forgives the loan, the note is included in her gross estate.

Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes.

Cary and Bo are husband and wife. Using their community funds, they create a trust, life estate to Bo, remainder to their children. Four years later, Bo predeceases Cary. Nothing as to this trust is included in Bo's gross estate.

In which of the following situations has a gift occurred?

In which, if any, of the following independent situations can the alternate valuation date be elected? Value of Gross Estate Estate Tax Result Date of Alternate Date of Alternate Death Date Death Date

A transfer in trust in which the trustee has the power to accumulate income is not a gift of a future interest if the trustee never exercises the power.

The current $5 million exemption equivalent is not permanent but is scheduled to expire after 2012.

The U.S. has death tax conventions (i.e., treaties) with most of the countries of the world.

June made taxable gifts as follows: $400,000 in 1973, $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2011, June dies leaving a taxable estate of $4,000,000. June's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Iris dies intestate (i.e., without a will). All of her property passes to her heirs in accordance with the order of distribution prescribed under Federal law.

Although qualified tuition plans under § 529 are treated favorably for gift tax purposes, such plans are subject to estate tax consequences upon the grantor's death.

Lyle and Beatrice are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Beatrice, joint tenants with right of survivorship." If Lyle dies first, all of the land is included in his gross estate.

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

In community property states, all property acquired after marriage by either spouse is community property.

At one point, the tax rates applicable to transfers by gift were lower than those applying to transfers by death.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S: Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

Family Tax Planning

Income Taxation of Trusts and Estates

Filters