Question 1

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-State income tax refund received after death on a tax return filed before death.

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) H) and J)
N) C) and J)

Question 2

Brad holds a life estate in a trust created by his father, while Scott holds a life estate in a trust created by himself. Upon their deaths, Scott must include the trust in his gross estate, while Brad need not include his trust. Why?

Accepted Answer

Under the operation of § 2036, Scott has...

Question 3

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

Accepted Answer

A) True 
 B)False

Question 4

As a result of an auto accident from which she later died, Irene totaled a Bentley worth $95,000. If the insurance company covers $60,000 of the loss, Irene's estate can claim a casualty loss of $35,000 in arriving at the taxable estate.

Accepted Answer

A) True 
 B)False

Question 5

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-Howard establishes a trust, life estate to his children, remainder to the grandchildren. Under its terms, the trust is revocable by Howard.

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) E) and G)
N) A) and I)

Question 6

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-Inheritance tax

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) D) and K)
N) D) and J)

Question 7

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 8

Transfers to political organizations are exempt from the application of the Federal gift tax.

Accepted Answer

A) True 
 B)False

Question 9

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-QTIP election

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) A) and L)
N) C) and J)

Question 10

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-Decedent holds a life estate in a trust created by her spouse who died five years ago. The executor of the spouse's estate made a QTIP election as to the trust. Decedent's son is the remainderman of the trust.

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) E) and K)
N) C) and K)

Question 11

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 12

Cole purchases land for $500,000 and transfers it by gift to his two daughters, Madison and Paige, as equal joint tenants with the right of survivorship. Ten years later, when the land is worth $2,000,000, Madison predeceases Paige. Madison's executor includes none of the value of the land in her gross estate, as she contributed nothing toward its cost. Do you agree?

Accepted Answer

Madison's gross estate must in...

Question 13

Stacey inherits unimproved land (fair market value of $6 million)  from her father on June 1, 2015. Stacey disclaims her interest in the property as follows: one-third on December 1, 2015; one-third on January 3, 2016; and the remaining one-third on May 31, 2016. In all cases, the disclaimers pass the interest to her son (the next heir under state law) . The Federal gift tax applies to Stacey for:

Accepted Answer

A)  All of the disclaimers.
B)  The disclaimer made in 2015.
C)  The May 31, 2016 disclaimer.
D)  All of the disclaimers made in 2016.
E)  None of the disclaimers.F) A) and C)
G) A) and E)

Question 14

Peggy gives $200,000 to her grandson. This is an example of a direct skip for purposes of the GSTT (generation-skipping transfer tax).

Accepted Answer

A) True 
 B)False

Question 15

When Travis learns he is seriously ill, he transfers an insurance policy on his life (maturity value of $2,000,000) to his wife Alexis. The couple's adult children are the designated beneficiaries of the policy. Has Travis acted wisely?

Accepted Answer

Even if Travis lives for three years and...

Question 16

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-Joint tenancy

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) E) and I)
N) G) and I)

Question 17

Prior to her death in 2016, Alma made the following gifts.   Fair Market Value  Year  Asset  Date of Gift  Date of Death 2007 Marketable securities $400,000$900,0002014 Term life insurance policy −0−100,0002014 Unimproved land 900,000950,000\begin{array}{l}\begin{array} { c l c c } &&	ext { Fair Market Value }\	ext { Year } & 	ext { Asset } & 	ext { Date of Gift } & 	ext { Date of Death } \2007 & 	ext { Marketable securities } & \$ 400,000 & \$ 900,000 \2014 & 	ext { Term life insurance policy } & - 0 - & 100,000 \2014 & 	ext { Unimproved land } & 900,000 & 950,000\end{array}\end{array} Year 200720142014​ Asset  Marketable securities  Term life insurance policy  Unimproved land ​ Fair Market Value  Date of Gift $400,000−0−900,000​ Date of Death $900,000100,000950,000​​  As a result of the 2014 transfer, Alma paid a gift tax of $70,000. As to these transactions, Alma's gross estate includes:

Accepted Answer

A)  $0.
B)  $70,000.
C)  $100,000.
D)  $170,000.
E)  $1,120,000. F) A) and D)
G) A) and E)

Question 18

Match each statement with the correct choice. Some choices may be used more than once or not at all.
-Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Accepted Answer

A)  In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B)  Death does not defeat an owner's interest in property.
C)  Exists only if husband and wife are involved.
D)  A type of state tax on transfers by death.
E)  Must decrease the amount of the gross estate.F) Annual exclusion not allowed.G) Cumulative in effect.H) Right of survivorship present as to type of ownership.I) Avoids the terminable interest rule of the marital deduction.J) Exemption equivalent.K) Bypass amount.L) No correct match provided.M) H) and L)
N) F) and G)

Question 19

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

Accepted Answer

A)  A foreign tax credit is available.
B)  A credit for tax on prior transfers may be available.
C)  Post-1976 taxable gifts need to be considered.
D)  A charitable deduction is available.
E)  None of the above.F) A) and D)
G) D) and E)

Question 20

June made taxable gifts as follows: $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2016, June dies leaving a taxable estate of $4,000,000. June'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)  $5,500,000.
E)  None of the above.F) B) and D)
G) A) and C)

Exam 18: The Federal Gift and Estate Taxes

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

Correct Answer
verified

Match each statement with the correct choice. Some choices may be used more than once or not at all. -State income tax refund received after death on a tax return filed before death.

Correct Answer
verified

Correct Answer
verified
Madison's gross estate must in...
View Answer

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

Correct Answer
verified

Brad holds a life estate in a trust created by his father, while Scott holds a life estate in a trust created by himself. Upon their deaths, Scott must include the trust in his gross estate, while Brad need not include his trust. Why?

Correct Answer
verified
Under the operation of § 2036, Scott has...
View Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Joint tenancy

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

When Travis learns he is seriously ill, he transfers an insurance policy on his life (maturity value of $2,000,000) to his wife Alexis. The couple's adult children are the designated beneficiaries of the policy. Has Travis acted wisely?

Correct Answer
verified
Even if Travis lives for three years and...
View Answer

Transfers to political organizations are exempt from the application of the Federal gift tax.

Correct Answer
verified

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Inheritance tax

Correct Answer
verified

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Correct Answer
verified

June made taxable gifts as follows: $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2016, June dies leaving a taxable estate of $4,000,000. June's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Correct Answer
verified

Correct Answer
verified

Peggy gives $200,000 to her grandson. This is an example of a direct skip for purposes of the GSTT (generation-skipping transfer tax).

Correct Answer
verified

Match each statement with the correct choice. Some choices may be used more than once or not at all. -QTIP election

Correct Answer
verified

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Howard establishes a trust, life estate to his children, remainder to the grandchildren. Under its terms, the trust is revocable by Howard.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

As a result of an auto accident from which she later died, Irene totaled a Bentley worth $95,000. If the insurance company covers $60,000 of the loss, Irene's estate can claim a casualty loss of $35,000 in arriving at the taxable estate.

Correct Answer
verified

Exam 18: The Federal Gift and Estate Taxes

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

Correct AnswerverifiedShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -State income tax refund received after death on a tax return filed before death.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedMadison's gross estate must in...View AnswerShow Answer

To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

Correct AnswerverifiedShow Answer

Brad holds a life estate in a trust created by his father, while Scott holds a life estate in a trust created by himself. Upon their deaths, Scott must include the trust in his gross estate, while Brad need not include his trust. Why?

Correct AnswerverifiedUnder the operation of § 2036, Scott has...View AnswerShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Joint tenancy

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

When Travis learns he is seriously ill, he transfers an insurance policy on his life (maturity value of $2,000,000) to his wife Alexis. The couple's adult children are the designated beneficiaries of the policy. Has Travis acted wisely?

Correct AnswerverifiedEven if Travis lives for three years and...View AnswerShow Answer

Transfers to political organizations are exempt from the application of the Federal gift tax.

Correct AnswerverifiedShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Inheritance tax

Correct AnswerverifiedShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Correct AnswerverifiedShow Answer

June made taxable gifts as follows: $200,000 in 1977, $600,000 in 1985, and $700,000 in 2001. In 2016, June dies leaving a taxable estate of $4,000,000. June's tax base for applying the unified tax rate schedules (for estate tax purposes) is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Peggy gives $200,000 to her grandson. This is an example of a direct skip for purposes of the GSTT (generation-skipping transfer tax).

Correct AnswerverifiedShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -QTIP election

Correct AnswerverifiedShow Answer

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Howard establishes a trust, life estate to his children, remainder to the grandchildren. Under its terms, the trust is revocable by Howard.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As a result of an auto accident from which she later died, Irene totaled a Bentley worth $95,000. If the insurance company covers $60,000 of the loss, Irene's estate can claim a casualty loss of $35,000 in arriving at the taxable estate.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Madison's gross estate must in...
View Answer

Correct Answer
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Correct Answer
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Under the operation of § 2036, Scott has...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Even if Travis lives for three years and...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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