Exam 25: Transfer Taxes and Wealth Planning

Alexis transferred $400,000 to a trust with directions to pay income to her spouse, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?

Which of the following statements is(are) true for both gratuitous and testamentary transfers?

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

The exemption equivalent was repealed in 1976.

This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash. At Christmas, Samantha gave each of her three nephews Christmas gifts of an additional $5,000 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

The gift-splitting election only applies to gifts made by taxpayers who reside in community property states.

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $67,000. What is the amount of the taxable gift?

Adjusted taxable gifts are added to the taxable estate to accomplish which of the following objectives?

Which of the following statements is(are) true?

Ricardo transferred $1,000,000 of cash to State University for a new sports complex. Calculate the amount of the taxable gift.

Tracey is unmarried and owns $7 million in stock and bonds. What is the result if Tracey dies this year and leaves all of her property to a qualified charity?

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

A fiduciary is a legal entity that can only exist for a year.

Aiden transferred $2 million to an irrevocable trust with income to Valeria for her life and the remainder to Jocelyn (or her estate). Calculate the value of the remainder and the life estate if Valeria's age and the prevailing interest rate result in a Table S discount factor for the remainder of 0.47.

At his death Jose owned real estate worth $22 million but subject to a mortgage of $7 million. Which of the following is a true statement?

The unified credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax.

Which of the following is a true statement?

Andrew and Brianna are married and live in Texas, a community property state. For their birthdays this year Andrew gave cash gifts of $20,000 to each of his two daughters, and Brianna gave $30,000 to her niece. What is the amount of Andrew's taxable gifts?

At his death Tyrone's life insurance policy paid his estate $85,000. What amount, if any, is included in Tyrone's gross estate?

A gift tax return does not need to be filed unless the taxpayer has made current gifts in excess of the unified credit.