Question 1

Which of the following is a complete taxable gift?

Accepted Answer

A)  $20,000 in cash contributed to the committee to reelect Senator BlowHard.
B)  $15,000 in cash given directly to Valley Hospital for the care of a neighbor who was in an auto accident.
C)  $18,000 in cash given directly to a needy student to pay for college tuition.
D)  $55,000 in cash transferred to a former spouse under a written property settlement shortly after a divorce.
E)  None of the choices is a complete taxable gift.F) C) and E)
G) C) and D)

Question 2

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

Accepted Answer

A) True 
 B)False  True

Question 3

The testamentary transfer of property to a qualified charity is deductible in calculating the taxable estate without any ceiling limitation.

Accepted Answer

A) True 
 B)False

Question 4

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years.After 20 years the trust corpus would revert to Anthony.Which of the following is a true statement?

Accepted Answer

A)  Anthony has made a $250,000 gift.
B)  Anthony has made a $235,000 taxable gift.
C)  Anthony has not yet made a complete gift.
D)  Anthony has made a complete gift of the income interest only.
E)  None of the choices are true.F) A) and D)
G) B) and C)

Question 5

Ryan placed $280,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate).At the time of the gift,given the prevailing interest rate,Stephen's life estate was valued at $165,000 and the remainder at $115,000.What is the amount,if any,of Ryan's taxable gifts?

Accepted Answer

$150,000 and $115,000.The life estate is...

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

Accepted Answer

A) True 
 B)False

Question 8

For the holidays,Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah.Samuel is married to Wendy and they live in a community-property state.Has Samuel made any taxable gifts and,if so,in what amounts?

Accepted Answer

$2,500 and $7,000.Since the gifts are fr...

Question 9

A transfer of a terminable interest will not generally qualify for a marital deduction.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  Form 709 is due by the 15th day of the ninth month following the date of the gift.
B)  Form 709 must be filed if a taxpayer wishes to elect gift-splitting.
C)  Form 709 need not be filed unless a taxpayer's taxable gifts exceed the exemption equivalent.
D)  Form 709 is due nine months after the death of the decedent.
E)  None of the choices are true.F) B) and E)
G) D) and E) B

Question 11

The applicable credit is designed to:

Accepted Answer

A)  apply only to taxable transfers included in the gross estate.
B)  prevent taxation of cumulative transfers that do not exceed a certain minimum amount.
C)  apply to amounts not already eliminated by the exemption equivalent.
D)  exclude up to $15,000 per individual per year on any individual transfer.
E)  None of the choices are correct.F) A) and B)
G) B) and E)

Question 12

Which of the following is a true statement?

Accepted Answer

A)  Executor's fees paid by an estate are deductible in computing the gross estate.
B)  Funeral expenses for the decedent paid by an estate are deductible in computing the adjusted gross estate.
C)  An executor can choose to deduct the decedent's funeral expenses on either the estate tax return or the estate's income tax return.
D)  An executor can only deduct the costs of administering the decedent's estate on the estate's income tax return.
E)  None of the choices are true.F) None of the above
G) B) and C)

Question 13

A transfer of cash to a bank account held in joint tenancy with the right of survivorship is not a complete gift.

Accepted Answer

A) True 
 B)False

Question 14

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.

Accepted Answer

A) True 
 B)False

Question 15

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death.The policy was only valued at $25,000 prior to Tricia's death.What amount,if any,is included in Tricia's gross estate?

Accepted Answer

A)  $500,000.
B)  $25,000.
C)  $25,000 if Tricia transferred ownership of the policy within three years of her date of death.
D)  zero-life insurance proceeds due to the death of the decedent are not included in the decedent's gross estate.
E)  zero if Tricia's daughter refused to accept the proceeds.F) A) and D)
G) C) and D)

Question 16

At her death Siena owned real estate worth $200,000 that was titled with her sister in joint tenancy with the right of survivorship.Siena contributed $50,000 to the total cost of the property and her sister contributed the remaining $75,000.What amount,if any,is included in Siena's gross estate?

Accepted Answer

A)  $50,000.
B)  $125,000.
C)  $80,000.
D)  $100,000.
E)  None of the choices are correct.F) B) and D)
G) All of the above

Question 17

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship.Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000.What amount,if any,is included in Serena's gross estate?

Accepted Answer

A)  $50,000.
B)  $105,000.
C)  $80,000.
D)  $0.This property qualifies for the marital deduction.
E)  None of the choices are correct.F) C) and E)
G) B) and E)

Question 18

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses.The executor charged the estate for $24,000 in fees.What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Accepted Answer

A)  $32,000.
B)  $37,000.
C)  $56,000.
D)  $61,000.
E)  None of the choices are correct.F) C) and D)
G) D) and E)

Question 19

Which of the following transactions would not utilize the "Section 7520 rate" to calculate the value of the transfer?

Accepted Answer

A)  A transfer of property with a retained life estate.
B)  A transfer of property to a spouse.
C)  A transfer of a remainder interest in real property.
D)  A transfer of a 10-year term certain in real property.
E)  None of these choices utilizes the "Section 7520 rate" in the calculation of the value of the property.F) A) and D)
G) B) and C)

Question 20

This year Nicholas earned $500,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh.Has Nicholas made a taxable gift to Nevaeh and,if so,in what amount?

Accepted Answer

$235,000.In a common-law state,Nicholas has made a taxable gift to Nevaeh of $235,000 ($250,000 − $15,000 annual exclusion in 2019).If Nicholas is married to Nevaeh,the entire transfer will be offset by an annual exclusion and a marital deduction,so there is no taxable gift.

Exam 25: Transfer Taxes and Wealth Planning

Which of the following is a complete taxable gift?

Correct Answer
verified

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

Correct Answer
verified
True

The testamentary transfer of property to a qualified charity is deductible in calculating the taxable estate without any ceiling limitation.

Correct Answer
verified

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years.After 20 years the trust corpus would revert to Anthony.Which of the following is a true statement?

Correct Answer
verified

Ryan placed $280,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate).At the time of the gift,given the prevailing interest rate,Stephen's life estate was valued at $165,000 and the remainder at $115,000.What is the amount,if any,of Ryan's taxable gifts?

Correct Answer
verified
$150,000 and $115,000.The life estate is...
View Answer

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

Correct Answer
verified

An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

Correct Answer
verified

For the holidays,Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah.Samuel is married to Wendy and they live in a community-property state.Has Samuel made any taxable gifts and,if so,in what amounts?

Correct Answer
verified
$2,500 and $7,000.Since the gifts are fr...
View Answer

A transfer of a terminable interest will not generally qualify for a marital deduction.

Correct Answer
verified

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

Correct Answer
verified
B

The applicable credit is designed to:

Correct Answer
verified

Which of the following is a true statement?

Correct Answer
verified

A transfer of cash to a bank account held in joint tenancy with the right of survivorship is not a complete gift.

Correct Answer
verified

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.

Correct Answer
verified

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death.The policy was only valued at $25,000 prior to Tricia's death.What amount,if any,is included in Tricia's gross estate?

Correct Answer
verified

At her death Siena owned real estate worth $200,000 that was titled with her sister in joint tenancy with the right of survivorship.Siena contributed $50,000 to the total cost of the property and her sister contributed the remaining $75,000.What amount,if any,is included in Siena's gross estate?

Correct Answer
verified

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship.Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000.What amount,if any,is included in Serena's gross estate?

Correct Answer
verified

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses.The executor charged the estate for $24,000 in fees.What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Correct Answer
verified

Which of the following transactions would not utilize the "Section 7520 rate" to calculate the value of the transfer?

Correct Answer
verified

This year Nicholas earned $500,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh.Has Nicholas made a taxable gift to Nevaeh and,if so,in what amount?

Exam 25: Transfer Taxes and Wealth Planning

Which of the following is a complete taxable gift?

Correct AnswerverifiedShow Answer

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

Correct AnswerverifiedTrue

The testamentary transfer of property to a qualified charity is deductible in calculating the taxable estate without any ceiling limitation.

Correct AnswerverifiedShow Answer

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years.After 20 years the trust corpus would revert to Anthony.Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Ryan placed $280,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate).At the time of the gift,given the prevailing interest rate,Stephen's life estate was valued at $165,000 and the remainder at $115,000.What is the amount,if any,of Ryan's taxable gifts?

Correct Answerverified$150,000 and $115,000.The life estate is...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.

Correct AnswerverifiedShow Answer

For the holidays,Samuel gave a necklace worth $35,000 to Jennifer and jewelry worth $44,000 to Savannah.Samuel is married to Wendy and they live in a community-property state.Has Samuel made any taxable gifts and,if so,in what amounts?

Correct Answerverified$2,500 and $7,000.Since the gifts are fr...View AnswerShow Answer

A transfer of a terminable interest will not generally qualify for a marital deduction.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

The applicable credit is designed to:

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

A transfer of cash to a bank account held in joint tenancy with the right of survivorship is not a complete gift.

Correct AnswerverifiedShow Answer

The theft of property included in the gross estate is only deductible in calculating the taxable estate if the loss exceeds 10 percent of the decedent's adjusted gross estate.

Correct AnswerverifiedShow Answer

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death.The policy was only valued at $25,000 prior to Tricia's death.What amount,if any,is included in Tricia's gross estate?

Correct AnswerverifiedShow Answer

At her death Siena owned real estate worth $200,000 that was titled with her sister in joint tenancy with the right of survivorship.Siena contributed $50,000 to the total cost of the property and her sister contributed the remaining $75,000.What amount,if any,is included in Siena's gross estate?

Correct AnswerverifiedShow Answer

At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship.Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000.What amount,if any,is included in Serena's gross estate?

Correct AnswerverifiedShow Answer

The executor of Isabella's estate incurred administration expenses of $32,000 and paid $5,000 in funeral expenses.The executor charged the estate for $24,000 in fees.What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Correct AnswerverifiedShow Answer

Which of the following transactions would not utilize the "Section 7520 rate" to calculate the value of the transfer?

Correct AnswerverifiedShow Answer

This year Nicholas earned $500,000 and used it to purchase land in joint tenancy with a right of survivorship with Nevaeh.Has Nicholas made a taxable gift to Nevaeh and,if so,in what amount?

Correct Answerverified$235,000.In a common-law state,Nicholas has made a taxable gift to Nevaeh of $235,000 ($250,000 − $15,000 annual exclusion in 2019).If Nicholas is married to Nevaeh,the entire transfer will be offset by an annual exclusion and a marital deduction,so there is no taxable gift.

Correct Answer
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True

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$150,000 and $115,000.The life estate is...
View Answer

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$2,500 and $7,000.Since the gifts are fr...
View Answer

Correct Answer
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Correct Answer
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B

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