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Exam 27: The Federal Gift and Estate Taxes

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Question 71

Multiple Choice

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Classify each statement appropriately. -State income taxes accrued prior to death.

A) Deductible from the gross estate in arriving at the taxable estate.
B) Not deductible from the gross estate in arriving at the taxable estate.

C) A) and B)
D) undefined

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Question 72

True/False

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A husband and wife make a gift of their jointly owned vacation home to their adult children.The gift-splitting election must be made.

A) True
B) False

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Question 73

Multiple Choice

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Concerning the Federal estate tax deduction for asset transfers to a surviving spouse:

Iris dies intestate (i.e.,without a will).All of her property passes to her heirs in accordance with the order of distribution prescribed under applicable state law.

Which,if any,of the following statements correctly reflects the rules applicable to the alternate valuation date?

A lifetime transfer that is supported by full and adequate consideration is not a gift.

Match each statement with the correct choice. Some choices may be used more than once or not at all. 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.Overrides the terminable interest rule of the marital deduction. j.Exemption equivalent. k.Bypass amount. l.No correct match provided. -Election to split gifts

At the time of Clint's death,part of his estate consists of the following. ​ Under Clint's will,all of his property passes to his wife,Jennifer.How much marital deduction is Clint's estate allowed? Clint and Jennifer live in Tennessee.

The amount of the unified tax credit is the same for both transfers by gift and transfers by death.

Harry and Brenda are husband and wife.Using his funds,Harry purchases real estate which he lists as: "Harry and Brenda,tenants by the entirety with right of survivorship." If Brenda dies first,none of the real estate will be included in her gross estate.

Classify each statement appearing below. -Meg gives her 18-year-old son money for his college tuition and living expenses (e.g.,room and board) .

Interest earned on state and local bonds is not subject to the Federal estate tax.

Classify each of the independent statements appearing below. -Land held as tenants by the entirety with surviving spouse.Decedent provided none of the funds.

Classify each statement appearing below. -Clarence pays the medical providers (e.g.,physicians,hospital) for his aunt's knee replacement operation.The aunt does not qualify as Clarence's dependent.

When one spouse predeceases the other,the credit for prior transfers does not apply. a.Why? b.Under what circumstances might the credit apply?

In which of the following independent situations has Trent made a gift?

Ling and Jiang are unrelated and equal joint tenants in a plot of land.Ling died this year.Ling's share of the land goes to:

In the case of a transfer by gift,a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

Lily pays for her grandson's college expenses.Under what conditions might such payments not be a gift?

Which of the following is a correct statement regarding the filing of a gift tax return (Form 709) ?