Exam 14: Transfer Taxes and Wealth Planning

A unified credit is subtracted in calculating both the gift tax and the estate tax. Why doesn't this calculation have the effect of increasing the total unified credit amount?

Jonathan transferred $90,000 of cash to a trust this year for the benefit of Hannah, age 10. The trustee has the discretion to distribute income or corpus (principal) for Hannah's benefit and is required to distribute all assets to Hannah (or her estate) not later than Hannah's 21^st birthday. What is the amount of the taxable gift?

Only complete gifts are subject to the Federal gift tax.

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

Which of the following is a completed taxable gift?

Which of the following statements is(are) true?

Christopher's residence was damaged by a storm during the administration of his estate. Christopher's executor paid $120,000 to repair the residence after the storm. Which of the following is a true statement?

The tax on cumulative taxable gifts is reduced by the unified credit regardless of whether any unified credit was used in prior years.

This year Carlos and Hailey purchased realty for $480,000 and took title as equal tenants in common. However, Hailey was able to provide only $200,000 of the purchase price and Carlos paid the remaining $280,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

Which of the following is a true statement?

The calculation of the value of a life estate in a trust generally does not depend upon which of the following factors?

Ethan owned a vacation home at the time of his death. Which of the following is a true statement if Ethan was married to Emma and resided in a common law state at the time of his death?

The debts of the decedent at the time of death are deducted in calculating the taxable estate.

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death. The policy was only valued at $25,000 prior to Tricia's death. What amount, if any, is included in Tricia's gross estate?

No deductions are allowed when calculating the taxable estate.

Which of the following is a true statement about the Federal gift tax return (Form 709)?

At her death Emily owned real estate worth $2.5 million and other property worth $1 million. Property taxes of $200,000 were accrued on the real estate at the time of Emily's death. Which of the following is a true statement?

Sophia is single and owns the following property: Sophia owns the real property in joint tenancy with Daniel. They purchased the property several years ago for $1 million. Sophia was only able to provide $200,000 of the purchase price. If Sophia dies, what is the amount of her gross estate?

Both spouses must consent to any gift-splitting election.

Which of the following is a true statement?