Question 1

Which of the following is not a characteristic of both the Federal gift tax and the Federal estate tax?

Accepted Answer

A)   A deduction for state death taxes may be available.
B)   A charitable deduction is available.
C)   A marital deduction is available.
D)   An exclusion amount is available in computing the tax. A

Question 2

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.
-Note receivable issued by a grandson and forgiven by the decedent in her will.

Accepted Answer

a

Question 3

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  True

Question 4

Classify each statement appearing below.
a. No taxable transfer occurs 
b. Gift tax applies
c. Estate tax applies
-Under her father's will, Faith is to receive 10,000 shares of GE common stock. Ten months after her father's death, Faith disclaims 10,000 shares.

Accepted Answer

The answer of Classify each statement appearing below.
a. No taxable...

Question 5

Concerning the Federal estate tax deduction for asset transfers to charity:

Accepted Answer

A)   The deduction is allowed only if the decedent had a valid will.
B)   A deduction is allowed for a gift to the cemetery association.
C)   A deduction is disallowed if the gift is made to the United Way of Bosnia.
D)   All of the above statements are true.

Question 6

Andrea dies on April 30. 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 2)  on an apartment building she owned.
B)   Rents for the month of March (received on May 2)  on an apartment building she owned.
C)   Insurance recovery from a fire which occurred on November 1, and destroyed Andrea's residence.
D)   A loan made by Andrea to her daughter and forgiven by Andrea in a prior tax year.

Question 7

Ben and Lynn are married and have four pre-teen grandchildren. They want to contribute to a § 529 plan on behalf of their education. For 2018, what is the maximum amount they can transfer to the plan without making a taxable gift?

Accepted Answer

The answer of Ben and Lynn are married and have...

Question 8

Walt dies intestate (i.e., without a will) in the current year with a gross estate valued at $4,000,000. Under applicable state law, Walt's property passes to Kelly or to Belle, in that order. Kelly has an estimated net worth of $3,000,000 while Belle's is zero. From a tax planning standpoint, what course of action might be advisable?

Accepted Answer

The answer of Walt dies intestate (i.e., without a will)...

Question 9

Which, if any, of the following is a characteristic of the Federal gift tax?

Accepted Answer

A)   A charitable deduction is available.
B)   The alternate valuation date of § 2032 can be elected.
C)   A disclaimer procedure may avoid the tax.
D)   A marital deduction is available.
E)   None of the above.

Question 10

The Federal unified transfer tax exclusion amount:

Accepted Answer

A)   Is indexed for inflation.
B)   Applies only to the estate tax.
C)   Is a different amount for the estate and gift taxes.
D)   Is doubled on a joint gift tax return.

Question 11

Lyle and Kelly are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Kelly, joint tenants with right of survivorship." If Kelly dies first, none of the land is included in her gross estate.

Accepted Answer

A) True 
 B)False

Question 12

If the value of the gross estate is lower on the alternate valuation date than on the date of death, the date of death valuation cannot be used.

Accepted Answer

A) True 
 B)False

Question 13

In most cases, the gross estate of a decedent is larger than the probate estate.

Accepted Answer

A) True 
 B)False

Question 14

Ray purchases U.S. savings bonds which he lists as "Ray and Donna" as co-owners. Donna is Ray's daughter.
Donna predeceases Ray. No gift or estate tax consequences result from this situation.

Accepted Answer

A) True 
 B)False

Question 15

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.
-State income tax refund received after death on a tax return filed before death.

Accepted Answer

The answer of Classify each of the independent statements appearing...

Question 16

Pursuant to Corey's will, Emma (Corey's sister) inherits his property. Emma dies in a later tax year. 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 is:

Accepted Answer

A)   $0 if Emma died 9 1/2 years after Corey.
B)   $300,000 if Emma died 3 years after Corey.
C)   $400,000 if Emma died 1 year after Corey.
D)   $240,000 if Emma died 5 1/2 years after Corey.

Question 17

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.
-Decedent owned a policy on the life of his spouse with himself as the designated beneficiary. The spouse survives.

Accepted Answer

The answer of Classify each of the independent statements appearing...

Question 18

At the time of her death, Emma still owed $36,000 on her church pledge for the year. Because church pledges are not an enforceable obligation in the state where Emma resided, her estate cannot claim a deduction for the $36,000 that it owes and later pays.

Accepted Answer

A) True 
 B)False

Question 19

Murray owns an insurance policy on the life of his father, Logan. Upon Logan's death, the policy proceeds of $2,000,000 are paid to the designated beneficiary, Grace. What are the transfer tax consequences resulting from Logan's death, based on the following independent assumptions?
a. Grace is Murray's daughter.
b. Grace is Murray's wife.
c. What are the tax consequences if Murray dies first (i.e., predeceases both Grace and Logan)?

Accepted Answer

The answer of Murray owns an insurance policy on the...

Question 20

The Federal gift-splitting election:

Accepted Answer

A)   Allows the annual exclusion of both spouses to reduce the gift tax due.
B)   Allows the exemption equivalent of both spouses to reduce the gift tax due.
C)   Is made on both spouses' Forms 709.
D)   All of the above.

Exam 27: The Federal Gift and Estate Taxes

Which of the following is not a characteristic of both the Federal gift tax and the Federal estate tax?

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. -Note receivable issued by a grandson and forgiven by the decedent in her will.

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

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Under her father's will, Faith is to receive 10,000 shares of GE common stock. Ten months after her father's death, Faith disclaims 10,000 shares.

Concerning the Federal estate tax deduction for asset transfers to charity:

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

Ben and Lynn are married and have four pre-teen grandchildren. They want to contribute to a § 529 plan on behalf of their education. For 2018, what is the maximum amount they can transfer to the plan without making a taxable gift?

Which, if any, of the following is a characteristic of the Federal gift tax?

The Federal unified transfer tax exclusion amount:

Lyle and Kelly are brother and sister. Using his funds, Lyle purchases land, listing title as: "Lyle and Kelly, joint tenants with right of survivorship." If Kelly dies first, none of the land is included in her gross estate.

If the value of the gross estate is lower on the alternate valuation date than on the date of death, the date of death valuation cannot be used.

In most cases, the gross estate of a decedent is larger than the probate estate.

Ray purchases U.S. savings bonds which he lists as "Ray and Donna" as co-owners. Donna is Ray's daughter. Donna predeceases Ray. No gift or estate tax consequences result from this situation.

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. -State income tax refund received after death on a tax return filed before death.

At the time of her death, Emma still owed $36,000 on her church pledge for the year. Because church pledges are not an enforceable obligation in the state where Emma resided, her estate cannot claim a deduction for the $36,000 that it owes and later pays.

The Federal gift-splitting election: