Exam 27: The Federal Gift and Estate Taxes

The Federal gift tax does not include a:

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

Although qualified tuition plans under § 529 are treated favorably for gift tax purposes, such plans are included in the gross estate upon the grantor's death.

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Homer purchases a U.S. savings bond listing title as: "Homer, payable to Bernice upon Homer's death." Bernice is Homer's sister. Homer dies four years later, and Bernice cashes in the bond and keeps the proceeds.

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Homer purchases a U.S. savings bond listing title as: "Homer, payable to Bernice upon Homer's death." Bernice is Homer's sister.

Sam purchases a U.S. savings bond which he registers as follows: "Sam, payable to Don upon Sam's death." A gift occurs when Sam purchases the bond.

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

Daniel and Mia acquired realty for $2 million, with Daniel furnishing $1.5 million of the purchase price and Mia providing the balance. Title to the property is listed as: "Daniel and Mia, joint tenants with right of survivorship." This year Mia dies first when the realty is worth $4 million. How much is included in Mia's gross estate under the following circumstances? a. Daniel and Mia are brother and sister. b. Daniel and Mia are husband and wife.

In which, if any, of the following independent situations can the alternate valuation date be elected?

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 of the independent statements appearing below. 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. -Cash dividends on stock owned by the decedent (declaration and record dates preceded death but payment date was after death).

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

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.

Classify each of the independent statements appearing below. 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. -Bank account held as joint tenant with mother. Mother provided all of the funds. Mother survives.

Pauline sells antique furniture to her daughter, Nicole, for $10,000. If the furniture is really worth $100,000, Pauline has made a gift to Nicole of $100,000.

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.

Mandy and Hal (mother and son) purchased land for $600,000 as joint tenants with right of survivorship. Of the $600,000 purchase price, Mandy provided $300,000 and Hal $300,000 (of which $200,000 had been received as a gift from Mandy). Hal dies first when the land is worth $3,000,000. As to the land, Hal's gross estate must include:

Classify each statement appropriately. 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. -Selling expenses incurred to sell estate assets in order to pay administration expenses.

A father wants to give a parcel of land to his two children. If he wants the survivor to have sole ownership, he should list ownership of the property as joint tenants.