Question 1

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 2

Bernard's will passes $800,000 of cash to his widowed sister,Marie.The estate tax attributable to the cash is $120,000.Marie dies five years later,and the estate tax generated by the $800,000 is $140,000.How much of a credit for tax on prior transfers will Marie's estate be allowed?

Accepted Answer

$72,000.60

Question 3

Concerning the election to split gifts under § 2513,which of the following statements is incorrect?

Accepted Answer

A) The election can be made even if the parties are not married for the entire year of the gift. 
B) The election must take into account any prior taxable gifts made by both spouses. 
C) The election doubles the number of annual exclusions available. 
D) The election has no utility in a community property jurisdiction. 
E) The election can be made even if the parties are divorced and one spouse has remarried by the end of the year. 
A) The election can be made even if the parties are not married for the entire year of the gift. 
B) The election must take into account any prior taxable gifts made by both spouses. 
C) The election doubles the number of annual exclusions available. 
D) The election has no utility in a community property jurisdiction. 
E) The election can be made even if the parties are divorced and one spouse has remarried by the end of the year.

Question 4

Death does not defeat a deceased spouse's interest in community property.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) Monetary amount required to elect the alternate valuation date under § 2032. 
B) Unified transfer tax credit. 
C) Annual exclusion. 
D) Unified transfer tax rates. 
E) All of the above. 
A) Monetary amount required to elect the alternate valuation date under § 2032. 
B) Unified transfer tax credit. 
C) Annual exclusion. 
D) Unified transfer tax rates. 
E) All of the above.

Question 6

A surviving spouse's share of the community property is not included in the deceased spouse's gross estate.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

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.

Accepted Answer

The answer of At the time of her death in...

Question 10

Which,if any,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. 
E) None of the above. 
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. 
E) None of the above.

Question 11

In 2007,Katherine made some taxable gifts upon which she paid a Federal gift tax of $96,000.If Katherine dies in 2009,the $96,000 is included in her gross estate under the "gross up" rule.

Accepted Answer

A) True 
 B)False

Question 12

Sidney dies and leaves property to his sister Giselle.Three years later,Giselle dies.Under § 2013 (credit for tax on prior transfers),Giselle's estate can claim a full credit for any Federal estate taxes paid by Sidney's estate as to amounts passing to Giselle.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

In which,if any,of the following independent situations has Jean made a gift?

Accepted Answer

A) Jean gives her 19-year old son $20,000 to be used by him for his college expenses. 
B) Jean buys her dependent grandfather a new wheelchair for his birthday. 
C) Jean sends $14,000 to Temple University to cover her nephew's room and board.The nephew does not qualify as Jean's dependent. 
D) Jean contributes $10,000 to her Congressman's reelection campaign. 
E) None of the above. 
A) Jean gives her 19-year old son $20,000 to be used by him for his college expenses. 
B) Jean buys her dependent grandfather a new wheelchair for his birthday. 
C) Jean sends $14,000 to Temple University to cover her nephew's room and board.The nephew does not qualify as Jean's dependent. 
D) Jean contributes $10,000 to her Congressman's reelection campaign. 
E) None of the above.

Question 15

In 2008 and with $100,000,Ronald establishes a joint savings account with his cousin,Allison.In 2009,Allison withdraws the $100,000 and disappears.Ronald made a gift to Allison in 2009.

Accepted Answer

A) True 
 B)False

Question 16

For Federal estate tax purposes,the gross estate includes property that the decedent owns at the time of death.It may also include property that the decedent no longer owns.Explain.

Accepted Answer

Transactions such as gifts within three

Question 17

Winston and Ginger are husband and wife and have always lived in Texas.At the time of Winston's prior death in 2009,he was insured in the amount of $1,000,000.The policy was taken out after their marriage,and premiums were paid 50% from community funds and 50% from Winston's separate property.The designated beneficiary of the policy is Harry,Ginger's son by a prior marriage.As to the policy proceeds:

Accepted Answer

A) $500,000 is included in Winston's gross estate,and Ginger has made a gift to Harry of $500,000. 
B) $750,000 is included in Winston's gross estate,and Ginger has made a gift to Harry of $250,000. 
C) $1,000,000 is included in Winston's gross estate. 
D) $750,000 is included in Winston's gross estate. 
E) None of the above. 
A) $500,000 is included in Winston's gross estate,and Ginger has made a gift to Harry of $500,000. 
B) $750,000 is included in Winston's gross estate,and Ginger has made a gift to Harry of $250,000. 
C) $1,000,000 is included in Winston's gross estate. 
D) $750,000 is included in Winston's gross estate. 
E) None of the above.

Question 18

At the time of his death,Trent owned some common stock.   The Aqua Corporation stock is sold by the executor of the estate seven months after Trent's death for $1,300,000.If the alternate valuation date is properly elected,the value of Trent's estate as to these stocks is:

Accepted Answer

A) $2,300,000. 
B) $2,400,000. 
C) $2,500,000. 
D) $2,700,000. 
E) None of the above. 
A) $2,300,000. 
B) $2,400,000. 
C) $2,500,000. 
D) $2,700,000. 
E) None of the above.

Question 19

Since the credit for state death taxes paid (under § 2011)has been eliminated,no double tax relief is available to an estate that is subject to both Federal and state death taxes.

Accepted Answer

A) True 
 B)False

Question 20

Prior to his death in 2009,Rex made the following gifts.   As a result of the 2008 transfer,Rex paid a gift tax of $70,000.As to these transactions,Rex's gross estate includes:

Accepted Answer

A) $0. 
B) $70,000. 
C) $170,000. 
D) $1,120,000. 
E) None of the above. 
A) $0. 
B) $70,000. 
C) $170,000. 
D) $1,120,000. 
E) None of the above.

Exam 27: The Federal Gift and Estate Taxes

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

Bernard's will passes $800,000 of cash to his widowed sister,Marie.The estate tax attributable to the cash is $120,000.Marie dies five years later,and the estate tax generated by the $800,000 is $140,000.How much of a credit for tax on prior transfers will Marie's estate be allowed?

Concerning the election to split gifts under § 2513,which of the following statements is incorrect?

Death does not defeat a deceased spouse's interest in community property.

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

A surviving spouse's share of the community property is not included in the deceased spouse's gross estate.

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.

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.

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

In 2007,Katherine made some taxable gifts upon which she paid a Federal gift tax of $96,000.If Katherine dies in 2009,the $96,000 is included in her gross estate under the "gross up" rule.

Sidney dies and leaves property to his sister Giselle.Three years later,Giselle dies.Under § 2013 (credit for tax on prior transfers),Giselle's estate can claim a full credit for any Federal estate taxes paid by Sidney's estate as to amounts passing to Giselle.

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

In which,if any,of the following independent situations has Jean made a gift?

In 2008 and with $100,000,Ronald establishes a joint savings account with his cousin,Allison.In 2009,Allison withdraws the $100,000 and disappears.Ronald made a gift to Allison in 2009.

For Federal estate tax purposes,the gross estate includes property that the decedent owns at the time of death.It may also include property that the decedent no longer owns.Explain.

At the time of his death,Trent owned some common stock. The Aqua Corporation stock is sold by the executor of the estate seven months after Trent's death for $1,300,000.If the alternate valuation date is properly elected,the value of Trent's estate as to these stocks is:

Since the credit for state death taxes paid (under § 2011)has been eliminated,no double tax relief is available to an estate that is subject to both Federal and state death taxes.

Prior to his death in 2009,Rex made the following gifts. As a result of the 2008 transfer,Rex paid a gift tax of $70,000.As to these transactions,Rex's gross estate includes:

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

Part 1--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Part 2--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses,1231,and Recapure Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

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