29 Jun Question Barbara sells a house with a FMV of
Question
Barbara sells a house with a FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of
A) $50,000.
B) $170,000.
C) $120,000.
D) $0.
2.
Vincent makes the following property transfers in the current year.
· $5,000 tuition for a grandson paid directly to the school
· $1,000 medical expense for a child paid directly to a hospital
· $500 donation to the Democratic party
· $10,000 property settlement in conjunction with a divorce
· $3,000 room and board at college for a grandson paid directly to the school
Vincent’s gifts for the year before considering the annual gift tax exclusion total
A) $19,500.
B) $19,000.
C) $3,000.
D) $0.
3.
Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?
A) Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year.
B) Ellen names Larry the beneficiary of a $100,000 lifeinsurancepolicy on Ellen’s life. The beneficiary designation is revocable.
C) Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed’s lifetime, beginning next year.
D) Ellen reimburses her granddaughter $15,000 for her tuition at medical school.
4.
Identify which of the following statements is true.
A) An individual making a qualified disclaimer can determine to whom the disclaimed property will pass.
B) A qualified disclaimer must be made within six months after (a) the day the property is transferred or (b) the day the person receiving the property becomes age 21, whichever is later.
C) One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property.
D) All are false.
5.
Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Calvin’s interest is
A) a remainder interest.
B) a life estate.
C) a reversionary interest.
D) a term certain.
6.
On April 1, Martha opens a jointbankaccount with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later Ned withdraws $600.
A) Martha has made a gift to Ned of $100.
B) Ned has made a gift to Martha of $500.
C) Martha has made a gift to Ned of $600.
D) Martha has made a gift to Ned of $1,000.
7.
Identify which of the following statements is false.
A) The marital deduction for gift tax purposes is limited to one-half the value of the property transferred.
B) The marital deduction is generally allowed since the transfer remains within the economic (husband/wife) unit.
C) The marital deduction for gift tax purposes is limited to the amount of the includable gift (e.g., the amount of the gift that is in excess of the annual exclusion).
D) Transfers of community property are eligible for the marital exclusion.
8.
Identify which of the following statements is false.
A) The gift-splitting election will apply to all transfers made during the portion of any year that the spouses electing gift splitting are married to each other.
B) The gift-splitting election is made separately on each gift either spouse makes.
C) Making gifts during one’s lifetime helps to reduce the amount of estate taxes owed at death.
D) In order to use gift splitting, both spouses must be U.S. citizens or residents at the time of the transfer.
9.
Steve gave stock with an adjusted basis of $7,000 and a FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is
A) $5,000.
B) $2,000.
C) $0.
D) none of the above
10.
On July 1, Frank loans his brother Matt $200,000. The loan is evidenced by an interest-free demand note. The loan is still outstanding on December 31. The applicable interest rate is 12%. Frank is treated as having made a gift of
A) $200,000.
B) $24,000.
C) $12,000.
D) $0.
11.
Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies
A) none of the stock will be included in Martin’s estate.
B) the stock’s value at the time of transfer to the trust will be included in Martin’s estate.
C) the value of the stock less the present value of the income receivable by Martin will be included in Martin’s estate.
D) the value of the stock at death will be included in Martin’s estate.
12.
The FMV of an asset for gift or estate tax purposes is the same except for
A) marketable securities.
B) land.
C) Life insurance policies.
D) patents.
13.
The alternate valuation date is generally
A) 3 months after the date of death.
B) 6 months after the date of death.
C) 9 months after the date of death.
D) 12 months after the date of death.
14.
Denise died April 1 and owned several bonds that paid interest March 31 and September 30. Also, she owned stock that paid dividends quarterly on March 31, June 30, September 30 and December 31. Denise’s estate received the interest and dividends on the payment dates. What should be included in Denise’s gross estate?
A) All interest and dividends received in year of death.
B) Only interest and dividends received prior to the date of death.
C) Only interest and dividends received after the date of death.
D) None of the interest and dividends received.
15.
On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2002. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?
A) six months
B) one year
C) three years
D) No minimum time period exists.
16.
The gross-up rule requires
A) all beneficial interests be included in the decedent’s estate.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.