Exam 27: The Federal Gift and Estate Taxes

At the time of Dylan's death,he was a resident of the United States.He owns land located in a foreign country,which is subject to that country's estate tax.This same land also can be subject to the Federal estate tax.

At the time of his death,Tom owned some common stock. ​ If the alternate valuation date is properly elected,the value of Tom's estate as to these stocks is:

Walt dies intestate (i.e.,without a will) in the current year with a gross estate valued at $4,000,000.Under applicable state law,Walt's property passes to Kelly or to Belle,in that order.Kelly has an estimated net worth of $3,000,000 while Belle's is zero.From a tax planning standpoint,what course of action might be advisable?

Classify each of the independent statements appearing below. -Interest on municipal bonds accrued after death.

Pursuant to Corey's will,Emma (Corey's sister) inherits his property.Emma dies in a later tax year.The estate tax attributable to the inclusion of the property in Corey's gross estate was $300,000.The estate tax attributable to the inclusion of the property in Emma's gross estate is $400,000.Emma's credit for the tax on prior transfers is:

Using his separate funds,Wilbur purchases an annuity which pays him a specified amount until death.Upon Wilbur's death,a reduced amount is to be paid to Marcia for her life.Marcia predeceases Wilbur.Nothing concerning the annuity contract is included in Marcia's gross estate.

Classify each statement appearing below. -Homer purchases a U.S.savings bond listing title as: "Homer,payable to Bernice upon Homer's death." Bernice is Homer's sister.

Setting up a trust to benefit a minor can:

At the time of her death in an automobile accident,Laura left a modest probate estate,most of which she had inherited from her mother several years ago.Comment on Laura's Federal estate tax position in connection with each of the following points. a.Probate estate versus gross estate. b.Credit for the tax on prior transfers.

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.

Kim,a resident and citizen of Korea,dies during an operation at the Mayo Clinic in Rochester (MN).Because Kim died in the U.S.,she will be subject to the Federal estate tax.

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

Sandy pays a local college for her non-dependent boyfriend's tuition.The payment is subject to the Federal gift tax.

For both the Federal gift and estate tax,a deduction is allowed for certain transfers to a spouse.

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

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:

Concerning the election to split gifts,which of the following statements is incorrect?

Concerning the Federal estate tax deduction for asset transfers to charity:

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

Classify each statement appearing below. -Using his own funds,Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace predeceases Nadine.