01 May Question2408. CHAPTER 19—FAMILY TAX PLANNING Question ES #7
Question
2408. CHAPTER 19—FAMILY TAX PLANNING Question ES #7
In arriving at the value of stock in a closely held business, the IRS frequently imputes goodwill. Comment on how the following independent factors would affect the determination of goodwill.
a.
Past profits include a large nonoperating gain.
b.
Shareholder-employees have not been receiving adequate compensation for their services.
c.
The shareholders have been financing corporate operations with interest-free loans.
2409. CHAPTER 19—FAMILY TAX PLANNING Question ES #8
The quantity of stock that a decedent owns in a closely held corporation can have an effect on its valuation. Explain this statement.
2410. CHAPTER 19—FAMILY TAX PLANNING Question ES #9
At the time of his death, Al owned a majority interest in Macaw Corporation, a closely held holding company. Macaw’s major asset is stock in ABC Grocers, a regional supermarket chain. The ABC stock has a per share basis to Macaw of $50 and is currently worth $2,000. In what manner, if any, may these facts have a bearing on the value of the Macaw stock included in Al’s gross estate?
2411. CHAPTER 19—FAMILY TAX PLANNING Question ES #10
A well-known artist dies and among her assets are a large number of her paintings. What approach might be taken to lower the value of her estate?
2412. CHAPTER 19—FAMILY TAX PLANNING Question ES #11
Zane makes a gift of stock in Cerulean Company to family members. Cerulean is a closely held corporation that is not traded on any exchange. To hedge on the value used for gift tax purposes, Zane also donates some of the stock to a qualified charity. Explain the advantage of this approach.
.
2413. CHAPTER 19—FAMILY TAX PLANNING Question ES #12
Clancy and Maureen are husband and wife and have always lived in a community property state. When Clancy learns that he is terminally ill, he gives to Maureen all of his share of the community investments that have declined in value. Why?
.
2414. CHAPTER 19—FAMILY TAX PLANNING Question ES #13
Even though it results in more estate tax liability, the executor of an estate uses date of death value (rather than § 2032 alternate valuation date).
a.
Why?
b.
Would it matter if community property is involved?
2415. CHAPTER 19—FAMILY TAX PLANNING Question ES #14
Robert and Kristen are husband and wife. Ten years ago, they purchased stock for $500,000. Kristen dies first in 2011 when the property is worth $1,000,000. Assuming the property passes to Robert, what is his income tax basis under the following ownership assumptions?
a.
A tenancy by the entirety is involved.
b.
Community property is involved.
c.
Why are the results different?
2416. CHAPTER 19—FAMILY TAX PLANNING Question ES #15
Regarding the effects of § 1014(e) (i.e., step-up in basis and the one-year rule), comment on the following variables.
a.
On the date of the gift, the property given is worth less than the donor’s adjusted basis.
b.
Under the donee’s will, the property passes to someone other than the donor or donor’s spouse.
2417. CHAPTER 19—FAMILY TAX PLANNING Question ES #16
In connection with a traditional IRA that is transferred at death, comment on the tax implications of each of the following.
a.
The beneficiary does nothing, and a distribution occurs.
b.
The beneficiary retitles the IRA as a “retirement IRA.”
c.
The additional tax advantages enjoyed when the beneficiary is the surviving spouse.
2418. CHAPTER 19—FAMILY TAX PLANNING Question ES #17
Warren sells property that he inherited five years ago from his mother, Candice. Warren believes that the property was significantly undervalued when it was listed on the estate tax return (i.e., Form 706) filed for Candice’s estate. For income tax purposes, can Warren deviate from this value? Explain.
2419. CHAPTER 19—FAMILY TAX PLANNING Question ES #18
One of the objectives of establishing a program of lifetime giving is to transfer assets that are likely to appreciate in value. Examples include life insurance policies, valuable collections (e.g., art works), vacation homes, and undeveloped real estate. However, such gifts could cause economic problems for certain donees. Explain why.
2420. CHAPTER 19—FAMILY TAX PLANNING Question ES #19
Giselle, a widow, has an extensive investment portfolio that has appreciated in value. Starting in 2009, she initiates a policy of making annual gifts of securities to her grandchildren who are attending college. Evaluate Giselle’s policy in terms of the:
a.
Federal gift and estate taxes.
b.
Federal income tax.
2421. CHAPTER 19—FAMILY TAX PLANNING Question ES #20
In terms of future estate tax (and death tax) savings, there are numerous advantages to making lifetime transfers. In this connection, comment on each of the following.
a.
Avoiding the tax on future appreciation.
b.
Preparing for the special use valuation method § 2032A.
c.
The annual exclusions utilized as to gifts.
d.
Payment of expenses prior to death.
2422. CHAPTER 19—FAMILY TAX PLANNING Question ES #21
In making a choice as to which assets to use in carrying out a program of lifetime giving, comment on each of the following assets.
a.
U.S. savings bonds.
b.
Installment notes receivable.
c.
Property subject to recapture of depreciation.
2423. CHAPTER 19—FAMILY TAX PLANNING Question ES #22
In making a choice as to which assets to use in carrying out a program of lifetime giving, comment on the use of each of the following assets.
a.
Assets that have declined in value.
b.
Land that has appreciated in value.
c.
Life insurance policies.
d.
Out-of-state realty.
2424. CHAPTER 19—FAMILY TAX PLANNING Question ES #23
Describe the various tax advantages that are available from donating a conservation easement to charity.
2425. CHAPTER 19—FAMILY TAX PLANNING Question ES #24
What is the rationale for the deferral and the equalization approaches to the marital deduction?
2426. CHAPTER 19—FAMILY TAX PLANNING Question ES #25
Brooke wants to donate a parcel of land (basis of $50,000; fair market value of $200,000) to her church, which it plans to use for a new parsonage. However, since Brooke wants to recover her capital investment, she plans to sell the property to the church for $50,000. Comment on the tax consequences of this proposed sale.
2427. CHAPTER 19—FAMILY TAX PLANNING Question ES #26
How can a disclaimer by an heir increase the charitable deduction allowed a decedent? Is such a disclaimer always wise? Explain.
2428. CHAPTER 19—FAMILY TAX PLANNING Question ES #27
In each of the following independent situations, describe the effect of the disclaimer procedure on Ray’s taxable estate. In this regard, advise as to how much should be disclaimed, by whom, and whether a disclaimer should be made, for the death in 2011.
a.
Ray’s will leaves $6,000,000 to his adult son and the remainder ($500,000) to Amy (Ray’s surviving wife).
b.
Ray’s will leaves $7,000,000 to Amy (Ray’s surviving wife) and the remainder ($3,000,000) to his adult son.
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.