Question 1

The election of the alternate valuation date does not include any income earned by the property after the date the deceased owner died.

Accepted Answer

A) True 
 B)False

Question 2

Before his nephew (Dean) leaves for college,Will loans him $400,000.Dean signs a note promising to repay the loan in five years.No interest element is provided.Which,if any,of the following is not a tax consequence of this arrangement?

Accepted Answer

A)  Will has made a gift to Dean of the interest element.
B)  Will has an interest expense deduction as to the interest element.
C)  Will has interest income as to the interest element.
D)  Dean may be allowed an income tax deduction as to the interest element.
E)  None of the above.F) A) and B)
G) A) and C)

Question 3

In 2007,Katherine made some taxable gifts upon which she paid a Federal gift tax of $96,000.If Katherine dies in 2009,the $96,000 is included in her gross estate under the "gross up" rule.

Accepted Answer

A) True 
 B)False

Question 4

At the time of his death on August 7,2009,Gordon owned the following assets.
  
How much,as to these transactions,is included in Gordon's gross estate?

Accepted Answer

$1,614,000.$950,000 (FMV of Tan stock)+ ...

Question 5

Concerning the election to split gifts under § 2513,which of the following statements is incorrect?

Accepted Answer

A)  The election can be made even if the parties are not married for the entire year of the gift.
B)  The election must take into account any prior taxable gifts made by both spouses.
C)  The election doubles the number of annual exclusions available.
D)  The election has no utility in a community property jurisdiction.
E)  The election can be made even if the parties are divorced and one spouse has remarried by the end of the year.F) B) and E)
G) A) and D)

Question 6

Which,if any,of the following is not 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)  The generation-skipping transfer tax may also apply.
D)  A disclaimer procedure may avoid the tax.
E)  A marital deduction is available.F) All of the above
G) B) and D)

Question 7

Generally,property that passes to a surviving spouse that is not a U.S.citizen does not qualify for the marital deduction.

Accepted Answer

The answer of Generally,property that passes to a surviving spouse...

Question 8

At the time of his death,Hal owned 10 cemetery lots worth $40,000 ($4,000 each)for use by himself and his family.These lots are included in Hal's gross estate and a deduction of $4,000 is allowed the estate.

Accepted Answer

A) True 
 B)False

Question 9

Rachel owns an insurance policy on the life of Albert with Belle as the designated beneficiary.Upon Rachel's prior death,nothing regarding this policy is included in her gross estate.

Accepted Answer

A) True 
 B)False

Question 10

Distributions from retirement plans and proceeds from life insurance plans usually are not subject to probate.

Accepted Answer

The answer of Distributions from retirement plans and proceeds from...

Question 11

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

Accepted Answer

A)  The generation-skipping transfer tax may apply.
B)  A charitable deduction is available.
C)  A marital deduction is available.
D)  A deduction for state death taxes may be available.
E)  An exclusion amount is available in computing the tax.F) A) and B)
G) C) and D)

Question 12

The same charitable organizations that qualify for income tax purposes qualify for estate tax purposes.

Accepted Answer

A) True 
 B)False

Question 13

Among the assets included in Taylor's gross estate are the following.
  
Three months after Taylor's death in 2009,her executor sells the Rail stock for $840,000.

Accepted Answer

The answer of Among the assets included in Taylor's gross...

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

Mitch pays the surgeon and the hospital for his aunt's gall bladder operation.If the aunt is not Mitch's dependent,the transfer is subject to the gift tax.

Accepted Answer

A) True 
 B)False

Question 16

Barry made taxable gifts as follows: $400,000 in 1973,$200,000 in 1974,$600,000 in 1985,and $700,000 in 2001.In 2009,Barry dies leaving a taxable estate of $4,000,000.Barry's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Accepted Answer

A)  $4,000,000.
B)  $4,500,000.
C)  $5,300,000.
D)  $5,900,000.
E)  None of the above.F) A) and D)
G) B) and E)

Question 17

At the time of her death,Hailey was involved in the following.

As to these transactions,Hailey's gross estate must include:

Accepted Answer

A)  $1,350,000.
B)  $1,500,000.
C)  $1,550,000.
D)  $1,700,000.
E)  None of the above.F) A) and B)
G) A) and C)

Question 18

In his will,Hernando provides for $50,000 to go to the Madrid,Spain,school system.Since it is a foreign charity,the bequest will not qualify as a charitable deduction for estate tax purposes.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Don and Roxana are husband and wife and live in a common law state.Pursuant to the estate tax rules applicable to annuities (§ 2039) ,which of the following is a correct statement?

Accepted Answer

A)  Don has a straight-life unmatured annuity.Upon his death,none of the annuity is included in his gross estate.
B)  Don's retirement plan,to which his employer contributed 50%,is in the form of an annuity with a survivorship feature covering Roxana.Upon Don's prior death,all of the value of the survivorship feature is included in his gross estate.
C)  Don has an annuity with a survivorship feature covering Roxana and to which she contributed 50% of the premiums.Upon Don's prior death,only 50% of the value of the survivorship feature is included in his gross estate.
D)  Don has an annuity with a survivorship feature covering Roxana.If Roxana dies first,nothing regarding the annuity is included in her gross estate.
E)  All of the above statements are true.F) B) and E)
G) A) and B)

Exam 18: The Federal Gift and Estate Taxes

Rachel owns an insurance policy on the life of Albert with Belle as the designated beneficiary.Upon Rachel's prior death,nothing regarding this policy is included in her gross estate.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which,if any,of the following is not a characteristic of the Federal gift tax?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA surviving spouse's portion of the comm...View AnswerShow Answer

At the time of his death on August 7,2009,Gordon owned the following assets. How much,as to these transactions,is included in Gordon's gross estate?

Correct Answerverified$1,614,000.$950,000 (FMV of Tan stock)+ ...View AnswerShow Answer

At the time of her death,Hailey was involved in the following. As to these transactions,Hailey's gross estate must include:

Correct AnswerverifiedShow Answer

Before his nephew (Dean) leaves for college,Will loans him $400,000.Dean signs a note promising to repay the loan in five years.No interest element is provided.Which,if any,of the following is not a tax consequence of this arrangement?

Correct AnswerverifiedShow Answer

Distributions from retirement plans and proceeds from life insurance plans usually are not subject to probate.

Correct AnswerverifiedShow Answer

In his will,Hernando provides for $50,000 to go to the Madrid,Spain,school system.Since it is a foreign charity,the bequest will not qualify as a charitable deduction for estate tax purposes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Barry made taxable gifts as follows: $400,000 in 1973,$200,000 in 1974,$600,000 in 1985,and $700,000 in 2001.In 2009,Barry dies leaving a taxable estate of $4,000,000.Barry's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Correct AnswerverifiedShow Answer

Mitch pays the surgeon and the hospital for his aunt's gall bladder operation.If the aunt is not Mitch's dependent,the transfer is subject to the gift tax.

Correct AnswerverifiedShow Answer

Generally,property that passes to a surviving spouse that is not a U.S.citizen does not qualify for the marital deduction.

Correct AnswerverifiedShow Answer

The election of the alternate valuation date does not include any income earned by the property after the date the deceased owner died.

Correct AnswerverifiedShow Answer

At the time of his death,Hal owned 10 cemetery lots worth $40,000 ($4,000 each)for use by himself and his family.These lots are included in Hal's gross estate and a deduction of $4,000 is allowed the estate.

Correct AnswerverifiedShow Answer

The same charitable organizations that qualify for income tax purposes qualify for estate tax purposes.

Correct AnswerverifiedShow Answer

Don and Roxana are husband and wife and live in a common law state.Pursuant to the estate tax rules applicable to annuities (§ 2039) ,which of the following is a correct statement?

Correct AnswerverifiedShow Answer

Concerning the election to split gifts under § 2513,which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

Among the assets included in Taylor's gross estate are the following. Three months after Taylor's death in 2009,her executor sells the Rail stock for $840,000.

Correct AnswerverifiedShow Answer

In 2007,Katherine made some taxable gifts upon which she paid a Federal gift tax of $96,000.If Katherine dies in 2009,the $96,000 is included in her gross estate under the "gross up" rule.

Correct AnswerverifiedShow Answer

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A surviving spouse's portion of the comm...
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$1,614,000.$950,000 (FMV of Tan stock)+ ...
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