Exam 27: The Federal Gift and Estate Taxes

Classify each statement appearing below. -Howard establishes a trust,life estate to his children,remainder to the grandchildren.Under its terms,the trust is revocable by Howard.

Some states impose inheritance taxes,but the Federal tax system does not.

Classify each statement appearing below. -Howard establishes a trust,life estate to his children,remainder to the grandchildren.Under its terms,the trust is revocable by Howard.Howard later relinquishes the right to revoke the trust.

At the time of his death on August 7,Michael owned the following assets. ​ How much,as to these transactions,is included in Michael's gross estate?

All of the charitable organizations that qualify for estate tax purposes also qualify for income tax purposes.

In 2005,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 2012 when the trust is worth $1,500,000,and Paula dies in 2018 when the trust is worth $2,000,000.Which,if any,of the following is a correct statement?

At the time of her death,Amber owns property worth $5,000,000.Other information regarding her affairs is as follows. ​ All of these items (except the casualty loss) were paid by her estate,and none were deducted on Form 1041 (income tax return of the estate).What is Amber's taxable estate?

Which of the following is not a characteristic of both the Federal gift tax and the Federal estate tax?

Which,if any,of the following items is subject to indexation (adjusted to reflect inflation)?

Classify each statement appropriately. -Post-death property taxes paid to the county on realty included in the gross estate.

The Federal transfer taxes generally apply a flat rate of:

The Federal gift-splitting election:

In determining whether a dividend issued on stock held by a decedent is included in the gross estate,the record date (rather than the declaration or payment dates) controls.

In 2015,Thalia purchases land for $900,000 and lists title in the names of her daughters as follows: "April and Theresa,joint tenants with right of survivorship." In 2017,April and Theresa purchase an apartment building for $1 million as equal tenants in common; April furnished $400,000 and Theresa furnished $600,000 of the cost.April dies first in 2018 when the land is worth $1.5 million and the apartment building is worth $2 million.One of the results of these transactions is:

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -​Under her father's will,Faith is to receive 10,000 shares of GE common stock.Eight months after her father's death,Faith disclaims the 10,000 shares.

Classify each of the independent statements appearing below. -State income tax refund received after death on a tax return filed before death.

To avoid the terminable interest limitation on the marital deduction,a QTIP election must be made.

At the time of her death,Emma still owed $36,000 on her church pledge for the year.Because church pledges are not an enforceable obligation in the state where Emma resided,her estate cannot claim a deduction for the $36,000 that it owes and later pays.

Classify each statement appearing below. -Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary.Four years later Jim dies,and Susan collects the insurance proceeds.

For gift tax purposes,a property settlement in consideration of marriage (i.e.,prenuptial agreement) is treated the same as a property settlement incident to a divorce.