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Exam 17: The Federal Gift and Estate Taxes

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Question 71

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

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

F) B) and C)
G) B) and E)

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Question 72

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

A) True
B) False

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Question 73

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Some states impose inheritance taxes,but the Federal tax system does not.

Classify each statement appropriately. 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 -Payment by the estate of church pledge made by decedent prior to death.

A property settlement incident to a divorce will be treated as a gift if such agreement is not mentioned in the final divorce decree.

At the time of her death,Heather was involved in three trust arrangements.Details regarding these trusts are summarized below. As to these trusts,how much will be included in Heather's gross estate?

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

How could the § 2513 election to split gifts help avoid the generation-skipping transfer tax (GSTT)?

Classify each statement appropriately. 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 -Casualty loss to property already distributed to an heir.

Classify each statement appropriately. 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 -Post-death property taxes paid to county on realty included in the gross estate.

Classify each of the independent statements appearing below. a.Some or all of the interest included in the decedent's gross estate. b.None of the interest included in the decedent's gross estate -Note receivable issued by a grandson and forgiven by the decedent in her will.

A Federal gift tax might be paid by the donee (rather than the donor).

At the time of his death,Norton was involved in the following transactions. What amount is included in Norton's gross estate?

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?

In which,if any,of the following independent situations has Geraldine made a gift?

Under the terms of a trust created by Billie,Jody (Billie's brother)has the right to determine how its income is to be divided among Billie's children.Jody holds a general power of appointment.

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.Scheduled to be eliminated by 2010. c.Exists only if owners are husband and wife. d.A type of state death tax. e.A certificate of deposit listed as "B. Brown, payable on proof of death to my daughter, Evelyn." 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.Exclusion amount k.Replaced by a deduction. l.No correct match provided. -Credit for state death taxes (under § 2011)

In 2006,Mario transferred several assets by gift to different persons.Mario dies in 2008.Information regarding the properties given is summarized below. The transfer of the land and the stocks and bonds resulted in a total gift tax of $60,000.As to these transactions,Mario's gross estate must include:

Under Terry's will,Tyrone has the power to determine how the income from a trust is to be divided between her children.The power that Tyrone holds also permits him to appoint to himself as much of the trust income as is necessary to maintain his health.The power Tyrone holds is "special" (and not "general").

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 Harry dies first,only one-half of the value of the real estate will be included in his gross estate.