Question 1

For Federal estate tax purposes,the gross estate does not include property that will pass to a qualifying charity.

Accepted Answer

A) True 
 B)False

Question 2

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

Accepted Answer

A) True 
 B)False

Question 3

At the time of her death on October 4,2012,Kaitlyn was involved in the following transactions.   As to these transactions,Kaitlyn's gross estate includes:

Accepted Answer

A) $1,048,000. 
B) $1,448,000. 
C) $3,000,000. 
D) $3,048,000. 
E) None of the above. 
A) $1,048,000. 
B) $1,448,000. 
C) $3,000,000. 
D) $3,048,000. 
E) None of the above.

Question 4

In 1992,Noah and Olivia acquire realty for $2 million,with Noah furnishing $500,000 of the purchase price and Olivia providing the balance.Title to the property is listed as: "Noah and Olivia,joint tenants with right of survivorship." In 2012,Olivia dies first when the realty is worth $3 million.How much is included in her gross estate under the following circumstances?

Accepted Answer

The answer of In 1992,Noah and Olivia acquire realty for...

Question 5

Paul,a U.S.citizen,will avoid the Federal estate tax if he becomes a Canadian resident and owns no property located in the U.S.at the time of his death.

Accepted Answer

A) True 
 B)False

Question 6

Manfredo makes a donation of $50,000 to the church where he was baptized in Mexico City.The gift does not qualify as a charitable contribution for Federal income tax purposes.

Accepted Answer

A) True 
 B)False

Question 7

Distributions from retirement plans and proceeds from life insurance plans usually are not subject to probate.

Accepted Answer

The answer of Distributions from retirement plans and proceeds from...

Question 8

When one spouse predeceases the other,the credit for prior transfers does not apply.

Accepted Answer

The answer of When one spouse predeceases the other,the credit...

Question 9

Homer and Laura are husband and wife.At the time of Homer's prior death in 2012,they owned the following: land as tenants by the entirety worth $2,000,000 (purchased by Homer)and stock as equal tenants in common worth $3,000,000 (purchased by Laura).Laura also owns an insurance policy on Homer's life (maturity value of $1,000,000)with herself as the designated beneficiary.Homer's will passes all his property to Laura.How much marital deduction is allowed Homer's estate?

Accepted Answer

A) $2,000,000. 
B) $2,500,000. 
C) $3,500,000. 
D) $4,500,000. 
E) None of the above. 
A) $2,000,000. 
B) $2,500,000. 
C) $3,500,000. 
D) $4,500,000. 
E) None of the above.

Question 10

At the time of her death,Abigail held a general power of appointment over a trust created by her grandmother in 1990.Since Abigail never exercised the general power,none of the trust is included in her gross estate.

Accepted Answer

A) True 
 B)False

Question 11

In most cases,the gross estate of a decedent is larger than the probate estate.

Accepted Answer

A) True 
 B)False

Question 12

The purpose of the marital deduction is to place married decedents in common law states on par with those in community property jurisdictions.

Accepted Answer

A) True 
 B)False

Question 13

Tom and Jean are husband and wife and live in California.In 1991,they use $400,000 of community funds to purchase an annuity from an insurance company.Under the terms of the contract,Tom is to receive $40,000 per year for life once he reaches age 65.If Jean outlives Tom,she is to receive $30,000 per year for life.Tom dies first in 2012 (and before reaching age 65).At this time,the value of Jean's interest is $500,000.As to this contract,Tom's gross estate includes:

Accepted Answer

A) $0. 
B) $200,000. 
C) $250,000. 
D) $500,000. 
E) None of the above. 
A) $0. 
B) $200,000. 
C) $250,000. 
D) $500,000. 
E) None of the above.

Question 14

Prior to his death in 2012,Alma made the following gifts.   As a result of the 2010 transfer,Alma paid a gift tax of $70,000.As to these transactions,Alma's gross estate includes:

Accepted Answer

A) $0. 
B) $70,000. 
C) $100,000. 
D) $170,000. 
E) $1,120,000. 
A) $0. 
B) $70,000. 
C) $100,000. 
D) $170,000. 
E) $1,120,000.

Question 15

Don and Roxana are husband and wife and live in a common law state.Pursuant to the estate tax rules applicable to annuities (§ 2039),which of the following is not a correct statement?

Accepted Answer

A) Don has a straight-life unmatured annuity.Upon his death,none of the annuity is included in his gross estate. 
B) Don's retirement plan,to which his employer contributed 50%,is in the form of an annuity with a survivorship feature covering Roxana.Upon Don's prior death,50% of the value of the survivorship feature is included in his gross estate. 
C) Don has an annuity with a survivorship feature covering Roxana and to which she contributed 50% of the premiums.Upon Don's prior death,only 50% of the value of the survivorship feature is included in his gross estate. 
D) Don has an annuity with a survivorship feature covering Roxana.If Roxana dies first,nothing regarding the annuity is included in her gross estate. 
E) None of the above statements are false. 
A) Don has a straight-life unmatured annuity.Upon his death,none of the annuity is included in his gross estate. 
B) Don's retirement plan,to which his employer contributed 50%,is in the form of an annuity with a survivorship feature covering Roxana.Upon Don's prior death,50% of the value of the survivorship feature is included in his gross estate. 
C) Don has an annuity with a survivorship feature covering Roxana and to which she contributed 50% of the premiums.Upon Don's prior death,only 50% of the value of the survivorship feature is included in his gross estate. 
D) Don has an annuity with a survivorship feature covering Roxana.If Roxana dies first,nothing regarding the annuity is included in her gross estate. 
E) None of the above statements are false.

Question 16

Reba purchases U.S.savings bonds which she lists in the name of Rod,Reba's son.The purchase of the bonds does not constitute a gift.

Accepted Answer

A) True 
 B)False

Question 17

At the time of his death,Jason was a participant in Silver Corporation's qualified pension plan and group term life insurance.The balance of the survivorship feature in his pension plan is:   The term insurance has a maturity value of $100,000.All amounts are paid to Pam,Jason's daughter.One result of these transactions is:

Accepted Answer

A) Pam must pay income tax on $300,000. 
B) Pam must pay income tax on $1,500,000. 
C) Jason's gross estate must include $1,600,000. 
D) Jason's gross estate must include $1,500,000. 
E) None of the above. 
A) Pam must pay income tax on $300,000. 
B) Pam must pay income tax on $1,500,000. 
C) Jason's gross estate must include $1,600,000. 
D) Jason's gross estate must include $1,500,000. 
E) None of the above.

Question 18

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 19

Sam purchases a U.S.savings bond which he registers as follows: "Sam,payable to Don upon Sam's death." A gift occurs when Sam purchases the bond.

Accepted Answer

A) True 
 B)False

Question 20

Two brothers,Sam and Bob,acquire real estate as equal tenants in common.Of the purchase price of $200,000,Sam furnished $80,000 while Bob provided the balance.If Sam dies first ten years later when the real estate is worth $600,000,his estate includes $240,000 as to the property.

Accepted Answer

A) True 
 B)False

For Federal estate tax purposes,the gross estate does not include property that will pass to a qualifying charity.

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

At the time of her death on October 4,2012,Kaitlyn was involved in the following transactions. As to these transactions,Kaitlyn's gross estate includes:

Paul,a U.S.citizen,will avoid the Federal estate tax if he becomes a Canadian resident and owns no property located in the U.S.at the time of his death.

Manfredo makes a donation of $50,000 to the church where he was baptized in Mexico City.The gift does not qualify as a charitable contribution for Federal income tax purposes.

Distributions from retirement plans and proceeds from life insurance plans usually are not subject to probate.

When one spouse predeceases the other,the credit for prior transfers does not apply.

At the time of her death,Abigail held a general power of appointment over a trust created by her grandmother in 1990.Since Abigail never exercised the general power,none of the trust is included in her gross estate.

In most cases,the gross estate of a decedent is larger than the probate estate.

The purpose of the marital deduction is to place married decedents in common law states on par with those in community property jurisdictions.

Prior to his death in 2012,Alma made the following gifts. As a result of the 2010 transfer,Alma paid a gift tax of $70,000.As to these transactions,Alma's gross estate includes:

Don and Roxana are husband and wife and live in a common law state.Pursuant to the estate tax rules applicable to annuities (§ 2039),which of the following is not a correct statement?

Reba purchases U.S.savings bonds which she lists in the name of Rod,Reba's son.The purchase of the bonds does not constitute a gift.

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.

Sam purchases a U.S.savings bond which he registers as follows: "Sam,payable to Don upon Sam's death." A gift occurs when Sam purchases the bond.

Two brothers,Sam and Bob,acquire real estate as equal tenants in common.Of the purchase price of $200,000,Sam furnished $80,000 while Bob provided the balance.If Sam dies first ten years later when the real estate is worth $600,000,his estate includes $240,000 as to the property.

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

Exam 18: The Federal Gift and Estate Taxes

For Federal estate tax purposes,the gross estate does not include property that will pass to a qualifying charity.

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

At the time of her death on October 4,2012,Kaitlyn was involved in the following transactions. As to these transactions,Kaitlyn's gross estate includes:

Paul,a U.S.citizen,will avoid the Federal estate tax if he becomes a Canadian resident and owns no property located in the U.S.at the time of his death.

Manfredo makes a donation of $50,000 to the church where he was baptized in Mexico City.The gift does not qualify as a charitable contribution for Federal income tax purposes.

Distributions from retirement plans and proceeds from life insurance plans usually are not subject to probate.

When one spouse predeceases the other,the credit for prior transfers does not apply.

At the time of her death,Abigail held a general power of appointment over a trust created by her grandmother in 1990.Since Abigail never exercised the general power,none of the trust is included in her gross estate.

In most cases,the gross estate of a decedent is larger than the probate estate.

The purpose of the marital deduction is to place married decedents in common law states on par with those in community property jurisdictions.

Prior to his death in 2012,Alma made the following gifts. As a result of the 2010 transfer,Alma paid a gift tax of $70,000.As to these transactions,Alma's gross estate includes:

Don and Roxana are husband and wife and live in a common law state.Pursuant to the estate tax rules applicable to annuities (§ 2039),which of the following is not a correct statement?

Reba purchases U.S.savings bonds which she lists in the name of Rod,Reba's son.The purchase of the bonds does not constitute a gift.

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.

Sam purchases a U.S.savings bond which he registers as follows: "Sam,payable to Don upon Sam's death." A gift occurs when Sam purchases the bond.

Two brothers,Sam and Bob,acquire real estate as equal tenants in common.Of the purchase price of $200,000,Sam furnished $80,000 while Bob provided the balance.If Sam dies first ten years later when the real estate is worth $600,000,his estate includes $240,000 as to the property.

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