FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 27: The Federal Gift and Estate Taxes

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

Classify each statement appearing below. -Hugh loans his adult daughter, Nadia, $800,000 to start her own business. Market rate interest is provided for, and Nadia signs a note that is payable in four years.

A) No taxable transfer occurs
B) Gift tax applies
C) Estate tax applies

D) B) and C)
E) A) and B)

Correct Answer

verified

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

For gift tax purposes, a property settlement in consideration of marriage (i.e., prenuptial agreement) is treated the same as a property settlement incident to a divorce.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

In 2012, Glen transferred several assets by gift to different persons. Glen dies in 2014. Information regarding the properties given is summarized below. Fair Market Value $\begin{array}{lcc} & \text { Date of Gift } & \text { Date of Death } \\\text { Insurance policy on Glen's life } & \$ 20,000 & \$ 200,000 \\\text { Unimproved land } & 890,000 & 900,000 \\\text { Stocks and bonds } & 600,000 & 800,000\end{array}$ The transfer of the land and the stocks and bonds resulted in a total gift tax of $60,000. As to these transactions, Glen's gross estate must include:

In which, if any, of the following independent situations can the alternate valuation date be elected? Value of Gross Estate Estate Tax Result Date of Death Alternate Date Date of Death Alternate Date

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Tenancy in common

At the time of her death in an automobile accident, Laura left a modest probate estate, most of which she had inherited from her mother several years ago. Comment on Laura's Federal estate tax position in connection with each of the following points. a. Probate estate versus gross estate. b. Credit for the tax on prior transfers.

Under certain circumstances, the gift-splitting election can be made even though the electing spouses are no longer married to each other.

Classify each statement appearing below. -Van takes out an insurance policy on his life and designates his estate as the beneficiary. Van dies four years later.

The election of the alternate valuation date can affect the amount of a charitable deduction allowed to an estate for a bequest to a qualified charity.

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

The IRS does not consider property settlements in consideration of marriage as being transfers for valuable consideration. Consequently, such prenuptial settlements are subject to the Federal gift tax. Why, then, are property settlements incident to divorce exempt from the gift tax?

Daniel's will provides that all of his property passes to a trust, life estate to his wife, remainder to charity. If Daniel's executor makes a QTIP election, the use of the alternate valuation date is not possible.

Gerald and Pat are husband and wife and live in New York. In 2005, they purchase an insurance policy (joint ownership) on Gerald's life and designate their daughter, Marie, as the beneficiary. The policy has a maturity value of $4,000,000 and lists ownership as tenants in common. Gerald dies first in 2013 and the insurance proceeds are paid to Marie. As to the proceeds:

All of the charitable organizations that qualify for estate tax purposes also qualify for income tax purposes.

At the time of Dylan's death, he was a resident of the United States. He owns land located in a foreign country, which is subject to that country's death tax. This same land also can be subject to the Federal estate tax.

In 2005, Mandy and Hal (mother and son) purchased land for $600,000 as joint tenants with right of survivorship. Of the $600,000 purchase price, Mandy provided $300,000 and Hal $300,000 (of which $200,000 had been received as a gift from Mandy) . In 2013, Hal dies first when the land is worth $3,000,000. As to the land, Hal's gross estate must include:

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Community property

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

Classify each statement appearing below. -Howard establishes a trust, life estate to his children, remainder to the grandchildren. Under its terms, the trust is revocable by Howard.

In 2005, Noah and Kelly acquire real estate for $2,000,000, with Noah furnishing $400,000 of the purchase price and Kelly providing the balance. Title to the property is listed as: "Noah and Kelly, equal tenants in common." Noah dies first in 2013, when the real estate is worth $4,000,000. a. Were there any tax consequences in 2005? Explain. b. How much, as to the real estate, is included in Noah's gross estate? c. As to parts a. and b., would it make any difference whether Noah and Kelly are brother and sister or husband and wife?