Question 1

How could the § 2513 election to split gifts help avoid the generation-skipping transfer tax (GSTT)?

Accepted Answer

The election to split by a married taxpa

Question 2

Interest on state and local bonds is subject to neither the Federal income tax nor the Federal estate tax.

Accepted Answer

A) True 
 B)False

Question 3

Transfers to political organizations are not exempt from the application of the Federal gift tax.

Accepted Answer

A) True 
 B)False

Question 4

Under his grandfather's will,Tad is entitled to receive shares of Kroger Corporation.For Federal tax purposes,Tad is not allowed to disclaim some of these shares and accept the others.

Accepted Answer

A) True 
 B)False

Question 5

Ginger dies on April 30,2009.Which,if any,of the following items is included in her gross estate?

Accepted Answer

A) Rents for the month of May (received on May 1)on an apartment building she owned.The alternate valuation date of § 2032 is not elected. 
B) Rents for the month of May (received on May 1)on an apartment building she owned.The alternate valuation date of § 2032 is elected. 
C) Insurance recovery from a fire which occurred on November 1,2009,and destroyed Ginger's residence. 
D) A loan made by Ginger to her daughter (who is a successful dentist)and forgiven by Ginger in her will. 
E) Choices b.and d.but not a.and c. 
A) Rents for the month of May (received on May 1)on an apartment building she owned.The alternate valuation date of § 2032 is not elected. 
B) Rents for the month of May (received on May 1)on an apartment building she owned.The alternate valuation date of § 2032 is elected. 
C) Insurance recovery from a fire which occurred on November 1,2009,and destroyed Ginger's residence. 
D) A loan made by Ginger to her daughter (who is a successful dentist)and forgiven by Ginger in her will. 
E) Choices b.and d.but not a.and c.

Question 6

At the time of her death on June 4,2009,Ava owned the following assets.
   As to these transactions,how much is included in Ava's gross estate?

Accepted Answer

$1,622,000.$800,000 (FMV of Gr

Question 7

Madeline pays for her mother's nursing home expenses.Under what conditions might such payments not be a gift?

Accepted Answer

Her mother might be her dependent and pr

Question 8

In 2007,Mario transferred several assets by gift to different persons.Mario dies in 2009.Information regarding the properties given is summarized below.   The transfer of the land and the stocks and bonds resulted in a total gift tax of $60,000.As to these transactions,Mario's gross estate must include:

Accepted Answer

A) $200,000. 
B) $260,000. 
C) $1,900,000. 
D) $1,960,000. 
E) None of the above. 
A) $200,000. 
B) $260,000. 
C) $1,900,000. 
D) $1,960,000. 
E) None of the above.

Question 9

At the time of Cal's death in 2009,part of his estate consists of the following.
   Under Cal's will,all of his property passes to his wife,Kim.How much marital deduction is Cal's estate allowed?

Accepted Answer

$3,400,000.$900,000

Question 10

Roger dies on March 3,2009.Which,if any,of the following items is not included in his gross estate?

Accepted Answer

A) Interest earned (after death)on City of Houston bonds. 
B) Cash dividend on stock owned by Roger-declaration date was February 5,2009,and record date was March 2,2009. 
C) Federal income tax refund for 2008-received on March 5,2009. 
D) Insurance recovery on auto accident that occurred on February 26,2009. 
E) Insurance recovery from theft of sailboat on March 4,2009. 
A) Interest earned (after death)on City of Houston bonds. 
B) Cash dividend on stock owned by Roger-declaration date was February 5,2009,and record date was March 2,2009. 
C) Federal income tax refund for 2008-received on March 5,2009. 
D) Insurance recovery on auto accident that occurred on February 26,2009. 
E) Insurance recovery from theft of sailboat on March 4,2009.

Question 11

The use of the election to split gifts under § 2513 is not necessary for spouses who live in community property states.

Accepted Answer

A) True 
 B)False

Question 12

Daniel's will provides that all of his property passes to a trust,life estate to his wife,remainder to charity.If Daniel's executor does not make a QTIP election,the use of the alternate valuation date is possible.

Accepted Answer

A) True 
 B)False

Question 13

As reflected by the tax law,Congressional policy relative to the Federal gift and estate taxes has been very inconsistent.Comment on this policy regarding the following time periods.

Accepted Answer

The answer of As reflected by the tax law,Congressional policy...

Question 14

For estate tax purposes,what is the difference between a surviving spouse's share of the community property and a dower (or courtesy)interest?

Accepted Answer

A surviving spouse's portion of the comm

Question 15

At the time of her death in 2009,Imelda was a participant in her employer's qualified pension plan.Her accrued balance in the plan is:
   Imelda also was covered by her employer's group term life insurance program.Her policy (maturity value of $100,000)is made payable to James (Imelda's husband).James is also the designated beneficiary of the pension plan.

Accepted Answer

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

Question 16

A transfer in trust in which the trustee has the power to accumulate income is a gift of a future interest even if the trustee never exercises the power.

Accepted Answer

A) True 
 B)False

Question 17

Pursuant to Corey's will,Emma (Corey's sister)inherits his property.Emma dies later.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 (under§ 2013)is:

Accepted Answer

A) $0 if Emma died 9 1/2 years after Corey. 
B) $32,000 if Emma died 3 years after Corey. 
C) $40,000 if Emma died 1 year after Corey. 
D) $24,000 if Emma died 5 1/2 years after Corey. 
E) None of the above amounts is correct. 
A) $0 if Emma died 9 1/2 years after Corey. 
B) $32,000 if Emma died 3 years after Corey. 
C) $40,000 if Emma died 1 year after Corey. 
D) $24,000 if Emma died 5 1/2 years after Corey. 
E) None of the above amounts is correct.

Question 18

In 2009,grandparents contribute jointly owned funds to a § 529 qualified tuition plan on behalf of their granddaughter.The maximum annual exclusion allowed to them is $65,000 ($13,000 * 5 years).

Accepted Answer

A) True 
 B)False

Question 19

In determining the Federal gift tax on a current gift:

Accepted Answer

A) Disregard taxable gifts made after 1976. 
B) Disregard taxable gifts made before 1977. 
C) Include all prior gifts. 
D) Claim a credit only for the gift taxes actually paid. 
E) None of the above. 
A) Disregard taxable gifts made after 1976. 
B) Disregard taxable gifts made before 1977. 
C) Include all prior gifts. 
D) Claim a credit only for the gift taxes actually paid. 
E) None of the above.

Question 20

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

Exam 27: The Federal Gift and Estate Taxes

How could the § 2513 election to split gifts help avoid the generation-skipping transfer tax (GSTT)?

Interest on state and local bonds is subject to neither the Federal income tax nor the Federal estate tax.

Transfers to political organizations are not exempt from the application of the Federal gift tax.

Under his grandfather's will,Tad is entitled to receive shares of Kroger Corporation.For Federal tax purposes,Tad is not allowed to disclaim some of these shares and accept the others.

Ginger dies on April 30,2009.Which,if any,of the following items is included in her gross estate?

At the time of her death on June 4,2009,Ava owned the following assets. As to these transactions,how much is included in Ava's gross estate?

Madeline pays for her mother's nursing home expenses.Under what conditions might such payments not be a gift?

At the time of Cal's death in 2009,part of his estate consists of the following. Under Cal's will,all of his property passes to his wife,Kim.How much marital deduction is Cal's estate allowed?

Roger dies on March 3,2009.Which,if any,of the following items is not included in his gross estate?

The use of the election to split gifts under § 2513 is not necessary for spouses who live in community property states.

Daniel's will provides that all of his property passes to a trust,life estate to his wife,remainder to charity.If Daniel's executor does not make a QTIP election,the use of the alternate valuation date is possible.

As reflected by the tax law,Congressional policy relative to the Federal gift and estate taxes has been very inconsistent.Comment on this policy regarding the following time periods.

For estate tax purposes,what is the difference between a surviving spouse's share of the community property and a dower (or courtesy)interest?

A transfer in trust in which the trustee has the power to accumulate income is a gift of a future interest even if the trustee never exercises the power.

In 2009,grandparents contribute jointly owned funds to a § 529 qualified tuition plan on behalf of their granddaughter.The maximum annual exclusion allowed to them is $65,000 ($13,000 * 5 years).

In determining the Federal gift tax on a current gift:

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.

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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