Question 1

A husband and wife make a gift of their jointly owned vacation home to their adult children.The gift-splitting election must be made.

Accepted Answer

A) True 
 B)False

Question 2

Match each statement with the correct choice. Some choices may be used more than once or not at all.
a.In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
b.Death does not defeat an owner's interest in property.
c.Exists only if husband and wife are involved.
d.A type of state tax on transfers by death.
e.Must decrease the amount of the gross estate.
f.Annual exclusion not allowed.
g.Cumulative in effect.
h.Right of survivorship present as to type of ownership.
i.Overrides the terminable interest rule of the marital deduction.
j.Exemption equivalent.
k.Bypass amount.
l.No correct match provided.
-Election to split gifts

Accepted Answer

The answer of Match each statement with the correct choice....

Question 3

Lily pays for her grandson's college expenses.Under what conditions might such payments not be a gift?

Accepted Answer

Lily's grandson might be her dependent a

Question 4

In the case of a transfer by gift,a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

Accepted Answer

A) True 
 B)False

Question 5

Classify each statement appearing below.
-Meg gives her 18-year-old son money for his college tuition and living expenses (e.g.,room and board).

Accepted Answer

A) No taxable transfer occurs 
B) Gift tax applies 
C) Estate tax applies 
A) No taxable transfer occurs 
B) Gift tax applies 
C) Estate tax applies

Question 6

When one spouse predeceases the other,the credit for prior transfers does not apply.
a.Why?
b.Under what circumstances might the credit apply?

Accepted Answer

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

Question 7

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 applicable state law.

Accepted Answer

A) True 
 B)False

Question 8

Which,if any,of the following statements correctly reflects the rules applicable to the alternate valuation date?

Accepted Answer

A) The election is made by the executor. 
B) Can be elected even though no estate tax return has to be filed. 
C) Can be elected only if it reduces the amount of the gross estate or reduces the estate tax liability. 
D) Its election does not affect the income tax basis of property included in the gross estate. 
A) The election is made by the executor. 
B) Can be elected even though no estate tax return has to be filed. 
C) Can be elected only if it reduces the amount of the gross estate or reduces the estate tax liability. 
D) Its election does not affect the income tax basis of property included in the gross estate.

Question 9

Interest earned on state and local bonds is not subject to the Federal estate tax.

Accepted Answer

A) True 
 B)False

Question 10

A lifetime transfer that is supported by full and adequate consideration is not a gift.

Accepted Answer

A) True 
 B)False

Question 11

Concerning the Federal estate tax deduction for asset transfers to a surviving spouse:

Accepted Answer

A) The deduction is disallowed for transfers between same-sex spouses. 
B) A deduction is allowed for a transfer to a member of a same-sex civil union. 
C) A deduction is allowed for life insurance proceeds paid to a surviving spouse. 
D) All of the above statements are true. 
A) The deduction is disallowed for transfers between same-sex spouses. 
B) A deduction is allowed for a transfer to a member of a same-sex civil union. 
C) A deduction is allowed for life insurance proceeds paid to a surviving spouse. 
D) All of the above statements are true.

Question 12

Which of the following is a correct statement regarding the filing of a gift tax return (Form 709)?

Accepted Answer

A) A donor must file a Form 709 in the same year in which the gift was made. 
B) The due date of a Form 709 is the same as the due date of the donor's Form 1040. 
C) A Form 709 may have to be filed even though the value of the gift was less than the amount of the annual exclusion. 
D) Melody gives her husband a new Mercedes convertible for his birthday. Melody must file a Form 709 to report the gift even though no gift tax results. 
A) A donor must file a Form 709 in the same year in which the gift was made. 
B) The due date of a Form 709 is the same as the due date of the donor's Form 1040. 
C) A Form 709 may have to be filed even though the value of the gift was less than the amount of the annual exclusion. 
D) Melody gives her husband a new Mercedes convertible for his birthday. Melody must file a Form 709 to report the gift even though no gift tax results.

Question 13

Classify each statement appearing below.
-Clarence pays the medical providers (e.g.,physicians,hospital) for his aunt's knee replacement operation.The aunt does not qualify as Clarence's dependent.

Accepted Answer

A) No taxable transfer occurs 
B) Gift tax applies 
C) Estate tax applies 
A) No taxable transfer occurs 
B) Gift tax applies 
C) Estate tax applies

Question 14

Classify each statement appropriately.
-State income taxes accrued prior to death.

Accepted Answer

A) Deductible from the gross estate in arriving at the taxable estate. 
B) Not deductible from the gross estate in arriving at the taxable estate. 
A) Deductible from the gross estate in arriving at the taxable estate. 
B) Not deductible from the gross estate in arriving at the taxable estate.

Question 15

In which of the following independent situations has Trent made a gift?

Accepted Answer

A) Trent established an irrevocable trust, income payable to himself for life and, upon his death, remainder to his children. 
B) Trent dies owning a U.S. savings bond with ownership listed as: "Trent, payable to Sue on Trent's death." Sue redeems the bond. 
C) Trent sends $25,000 to Alice's oral surgeon in payment of her dental implants. Alice is Trent's sister and does not qualify as his dependent. 
D) Trent pays Eva $800,000 in a property settlement of her marital rights. One month later, Trent and Eva are divorced. 
A) Trent established an irrevocable trust, income payable to himself for life and, upon his death, remainder to his children. 
B) Trent dies owning a U.S. savings bond with ownership listed as: "Trent, payable to Sue on Trent's death." Sue redeems the bond. 
C) Trent sends $25,000 to Alice's oral surgeon in payment of her dental implants. Alice is Trent's sister and does not qualify as his dependent. 
D) Trent pays Eva $800,000 in a property settlement of her marital rights. One month later, Trent and Eva are divorced.

Question 16

At the time of Clint's death,part of his estate consists of the following.
​
   
Under Clint's will,all of his property passes to his wife,Jennifer.How much marital deduction is Clint's estate allowed? Clint and Jennifer live in Tennessee.

Accepted Answer

$3,500,000.$1,000,00

Question 17

Classify each of the independent statements appearing below.
-Land held as tenants by the entirety with surviving spouse.Decedent provided none of the funds.

Accepted Answer

A) Some or all of the asset is included in the decedent's gross estate. 
B) None of the asset is included in the decedent's gross estate. 
A) Some or all of the asset is included in the decedent's gross estate. 
B) None of the asset is included in the decedent's gross estate.

Question 18

Harry and Brenda are husband and wife.Using his funds,Harry purchases real estate which he lists as: "Harry and Brenda,tenants by the entirety with right of survivorship." If Brenda dies first,none of the real estate will be included in her gross estate.

Accepted Answer

A) True 
 B)False

Question 19

Ling and Jiang are unrelated and equal joint tenants in a plot of land.Ling died this year.Ling's share of the land goes to:

Accepted Answer

A) The party named in Ling's will. 
B) Ling's surviving spouse. 
C) Jiang, under community property principles. 
D) Jiang, under a right of survivorship. 
A) The party named in Ling's will. 
B) Ling's surviving spouse. 
C) Jiang, under community property principles. 
D) Jiang, under a right of survivorship.

Question 20

The amount of the unified tax credit is the same for both transfers by gift and transfers by death.

Accepted Answer

A) True 
 B)False

Exam 27: The Federal Gift and Estate Taxes

A husband and wife make a gift of their jointly owned vacation home to their adult children.The gift-splitting election must be made.

Lily pays for her grandson's college expenses.Under what conditions might such payments not be a gift?

In the case of a transfer by gift,a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

Classify each statement appearing below. -Meg gives her 18-year-old son money for his college tuition and living expenses (e.g.,room and board).

When one spouse predeceases the other,the credit for prior transfers does not apply. a.Why? b.Under what circumstances might the credit apply?

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 applicable state law.

Which,if any,of the following statements correctly reflects the rules applicable to the alternate valuation date?

Interest earned on state and local bonds is not subject to the Federal estate tax.

A lifetime transfer that is supported by full and adequate consideration is not a gift.

Concerning the Federal estate tax deduction for asset transfers to a surviving spouse:

Which of the following is a correct statement regarding the filing of a gift tax return (Form 709)?

Classify each statement appearing below. -Clarence pays the medical providers (e.g.,physicians,hospital) for his aunt's knee replacement operation.The aunt does not qualify as Clarence's dependent.

Classify each statement appropriately. -State income taxes accrued prior to death.

In which of the following independent situations has Trent made a gift?

At the time of Clint's death,part of his estate consists of the following. ​ Under Clint's will,all of his property passes to his wife,Jennifer.How much marital deduction is Clint's estate allowed? Clint and Jennifer live in Tennessee.

Classify each of the independent statements appearing below. -Land held as tenants by the entirety with surviving spouse.Decedent provided none of the funds.

Harry and Brenda are husband and wife.Using his funds,Harry purchases real estate which he lists as: "Harry and Brenda,tenants by the entirety with right of survivorship." If Brenda dies first,none of the real estate will be included in her gross estate.

Ling and Jiang are unrelated and equal joint tenants in a plot of land.Ling died this year.Ling's share of the land goes to:

The amount of the unified tax credit is the same for both transfers by gift and transfers by death.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxable Exchanges

Property Transactions, capital Gains and Losses, sec1231, and Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganization

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters

At the time of Clint's death,part of his estate consists of the following. Under Clint's will,all of his property passes to his wife,Jennifer.How much marital deduction is Clint's estate allowed? Clint and Jennifer live in Tennessee.