Question 1

Adjusted taxable gifts are added to the taxable estate to accomplish which of the following objectives?

Accepted Answer

A)  Prevent double taxation of previously taxed gifts.
B)  Increase the marginal tax rate on previously taxed gifts.
C)  Increase the marginal tax rate on the taxable estate.
D)  Remove inter vivos transfers from cumulative taxable transfers.
E)  None of the choices are correct.F) C) and D)
G) C) and E)

Question 2

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren. How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Accepted Answer

$300,000.Isaac and his spouse can gift a...

Question 3

Which of the following is a true statement?

Accepted Answer

A)  A fiduciary entity is a legal entity that takes possession of property for the benefit of a person.
B)  An estate is a fiduciaryentity that comes into existence upon a person's death to transfer the decedent's real and personal property.
C)  A trust is also a fiduciaryentity whose purpose is to hold and administer the corpus for other persons (beneficiaries) .
D)  An estate exists only temporarily, but a trust may have a prolonged or even indefinite existence.
E)  All of the choices are true.F) C) and E)
G) B) and C)

Question 4

For 2020, the exemption equivalent for the estate tax is $11.58 million.

Accepted Answer

A) True 
 B)False

Question 5

The federal transfer taxes are calculated using cumulative lifetime transfers.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

Accepted Answer

A) True 
 B)False

Question 8

At his death in 2020, Nathan owned the following property:
  The real estate is subject to a $1,825,000 mortgage and Nathan made taxable gifts in 2009 totaling $3.0 million, at which time he offset the gift tax with an applicable credit (exemption equivalent of $3.0 million). Nathan has never been married. What is the amount of his estate tax due? (Use Exhibit 25-1.)

Accepted Answer

${{[a(18)]:#.##}} million in 2020.
Natha...

Question 9

The gift tax is imposed on inter vivos (lifetime)transfers.

Accepted Answer

A) True 
 B)False

Question 10

Matthew and Addison are married and live in Michigan, a common-law state. For the holidays Addison gave cash gifts of $42,250 to each of her two sons, and Matthew gave $42,700 to his daughter. What is the amount of Addison's taxable gifts if Matthew and Addison opt to gift-split?

Accepted Answer

A)  $52,200.
B)  $21,600.
C)  $18,600.
D)  $9,100.
E)  None of the choices are correct.F) A) and D)
G) C) and E)

Question 11

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 15 th 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) All of the above
G) C) and D)

Question 12

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Accepted Answer

A) True 
 B)False

Question 13

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

Accepted Answer

A)  A marital deduction and a deduction for casualty losses.
B)  A marital deduction for transfers of all terminable interests.
C)  The tax rate schedule for calculating gross transfer taxes.
D)  A charitable deduction and an annual exclusion.
E)  None of these choices list characteristics common to both the gift and the estate tax.F) B) and C)
G) All of the above

Question 14

At his death Trevor had a probate estate consisting of $4 million of property. Which of the following is a true statement about Trevor's estate or estate tax?

Accepted Answer

A)  Trevor must have a taxable estate of at least $4 million.
B)  Trevor must have an adjusted gross estate of at least $4 million.
C)  Trevor must have an estate tax base (cumulative taxable transfers) of at least $4 million.
D)  Trevor must have a gross estate of at least $4 million.
E)  None of the choices are necessarily true.F) All of the above
G) A) and E)

Question 15

Both spouses must consent to any gift-splitting election.

Accepted Answer

A) True 
 B)False

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) All of the above
G) C) and D)

Question 17

Which of the following is a true statement?

Accepted Answer

A)  A remainder interest held by the decedent at the time of death is not included in the decedent's gross estate.
B)  The value of a remainder interest depends in part on the Section 7520 interest rate at the time of death.
C)  The value of a remainder interest in a life estate is independent of the age of the life tenant.
D)  The value of a life estate does not depend upon the age of the life tenant.
E)  None of the choices are true.F) A) and E)
G) B) and D)

Question 18

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) B) and E)
G) C) and D)

Question 19

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Accepted Answer

A) True 
 B)False

Question 20

At her death Serena owned real estate worth $345,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $69,000 to the original cost of the property and her spouse contributed the remaining $138,000. What amount, if any, is included in Serena's gross estate?

Accepted Answer

A)  $69,000.
B)  $172,500.
C)  $138,000.
D)  $0. This property qualifies for the marital deduction.
E)  None of the choices are correct.F) D) and E)
G) B) and E)

Exam 25: Transfer Taxes and Wealth Planning

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

Correct Answer
verified

For 2020, the exemption equivalent for the estate tax is $11.58 million.

Correct Answer
verified

Matthew and Addison are married and live in Michigan, a common-law state. For the holidays Addison gave cash gifts of $42,250 to each of her two sons, and Matthew gave $42,700 to his daughter. What is the amount of Addison's taxable gifts if Matthew and Addison opt to gift-split?

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

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

Correct Answer
verified

Which of the following is a true statement?

Correct Answer
verified

At her death Serena owned real estate worth $345,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $69,000 to the original cost of the property and her spouse contributed the remaining $138,000. What amount, if any, is included in Serena's gross estate?

Correct Answer
verified

Both spouses must consent to any gift-splitting election.

Correct Answer
verified

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

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

Correct Answer
verified
${{[a(18)]:#.##}} million in 2020.
Natha...
View Answer

Adjusted taxable gifts are added to the taxable estate to accomplish which of the following objectives?

Correct Answer
verified

Which of the following is a true statement?

Correct Answer
verified

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Correct Answer
verified

The federal transfer taxes are calculated using cumulative lifetime transfers.

Correct Answer
verified

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Correct Answer
verified

The gift tax is imposed on inter vivos (lifetime)transfers.

Correct Answer
verified

At his death Trevor had a probate estate consisting of $4 million of property. Which of the following is a true statement about Trevor's estate or estate tax?

Correct Answer
verified

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

Correct Answer
verified

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren. How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Correct Answer
verified
$300,000.Isaac and his spouse can gift a...
View Answer

Exam 25: Transfer Taxes and Wealth Planning

The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes?

Correct AnswerverifiedShow Answer

For 2020, the exemption equivalent for the estate tax is $11.58 million.

Correct AnswerverifiedShow Answer

Matthew and Addison are married and live in Michigan, a common-law state. For the holidays Addison gave cash gifts of $42,250 to each of her two sons, and Matthew gave $42,700 to his daughter. What is the amount of Addison's taxable gifts if Matthew and Addison opt to gift-split?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

At her death Serena owned real estate worth $345,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $69,000 to the original cost of the property and her spouse contributed the remaining $138,000. What amount, if any, is included in Serena's gross estate?

Correct AnswerverifiedShow Answer

Both spouses must consent to any gift-splitting election.

Correct AnswerverifiedShow Answer

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

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

Correct Answerverified${{[a(18)]:#.##}} million in 2020.Natha...View AnswerShow Answer

Adjusted taxable gifts are added to the taxable estate to accomplish which of the following objectives?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

A serial gift strategy consists of arranging a trust to maximize the value of the applicable credit.

Correct AnswerverifiedShow Answer

The federal transfer taxes are calculated using cumulative lifetime transfers.

Correct AnswerverifiedShow Answer

The annual exclusion applies to cumulative gifts made to each donee over the course of the year.

Correct AnswerverifiedShow Answer

The gift tax is imposed on inter vivos (lifetime)transfers.

Correct AnswerverifiedShow Answer

At his death Trevor had a probate estate consisting of $4 million of property. Which of the following is a true statement about Trevor's estate or estate tax?

Correct AnswerverifiedShow Answer

Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax.

Correct AnswerverifiedShow Answer

Isaac is married and Isaac and his spouse agree that they want to transfer the maximum amount of cash to each of their four children and six grandchildren. How much cash in total can Isaac and his spouse transfer to his children and grandchildren each year without creating any taxable gifts?

Correct Answerverified$300,000.Isaac and his spouse can gift a...View AnswerShow Answer

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Correct Answer
verified
${{[a(18)]:#.##}} million in 2020.
Natha...
View Answer

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Correct Answer
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Correct Answer
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verified
$300,000.Isaac and his spouse can gift a...
View Answer