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| 1 | |
The Federal transfer taxes are calculated only using current transfers and ignoring previous transfers. |
| | A) | True |
| | B) | False |
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| 2 | |
For 2013 the exemption equivalent for the gift tax is $25 million. |
| | A) | True |
| | B) | False |
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| 3 | |
The probate estate includes real property owned by the decedent at the time of death. |
| | A) | True |
| | B) | False |
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| 4 | |
The gross estate includes the entire value of real property owned by a decedent and spouse in joint tenancy with the right of survivorship. |
| | A) | True |
| | B) | False |
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| 5 | |
To qualify as a completed gift property must be irrevocably relinquished by the donor and accepted by the donee. |
| | A) | True |
| | B) | False |
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| 6 | |
The annual exclusion eliminates any gratuitous transfer of a present interest in property. |
| | A) | True |
| | B) | False |
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| 7 | |
A withdrawal of money from a bank account held in joint tenancy with the right of survivorship cannot constitute a completed gift. |
| | A) | True |
| | B) | False |
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| 8 | |
A serial gift strategy consists of arranging gifts to minors to maximize the value of the unified credit. |
| | A) | True |
| | B) | False |
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| 9 | |
The unified credit is designed to: |
| | A) | apply only to taxable transfers included in the gross estate. |
| | B) | is set at $10 million for any single transfer. |
| | C) | apply to amounts not already eliminated by the exemption equivalent. |
| | D) | prevent taxation of cumulative transfers below a specified minimum amount. |
| | E) | None of the above. |
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| 10 | |
The estate and gift taxes share several common features. Which of the following characteristics are common to both the estate and gift taxes? |
| | A) | The amount of unified credit. |
| | B) | A charitable deduction. |
| | C) | A gift-splitting election. |
| | D) | the annual exclusion. |
| | E) | All of the above are characteristics common to both the gift and the estate tax. |
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| 11 | |
At her death Tyron owned a life insurance policy on his life that paid his wife $300,000 upon his death. The policy was only valued at $25,000 prior to Tyron's death. What amount, if any, is included in Tyron's gross estate? |
| | A) | $300,000 |
| | B) | $25,000 |
| | C) | $25,000 if Tyron transferred ownership of the policy any time prior to his date of death. |
| | D) | zero - life insurance proceeds paid to a surviving spouse are excluded from a gross estate. |
| | E) | zero if Tricia's daughter refused to accept the proceeds. |
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| 12 | |
At her death Silva owned real estate worth $500,000 and titled with her son in joint tenancy with the right of survivorship. The total cost of the property was $250,000. Silva contributed $50,000 to the total cost of the property while her son contributed the remaining $200,000. What amount, if any, is included in Silva's gross estate? |
| | A) | $50,000 |
| | B) | $100,000 |
| | C) | $250,000 |
| | D) | $500,000 |
| | E) | None of the above is correct. |
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| 13 | |
This year Drake and his son purchased real estate for an investment. The price of the property was $1,200,000, and the title named Drake and his son as joint tenants with the right of survivorship. Drake provided $900,000 of the purchase price and his son provided the remaining $300,000. What is the amount of the taxable gift? |
| | A) | $300,000. |
| | B) | $600,000. |
| | C) | $587,000. |
| | D) | $1,200,000. |
| | E) | None of the above - Don did not make a taxable gift. |
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| 14 | |
Ozzie and Harriet are married and live in Michigan, a common-law state. For the holidays Ozzie gave cash gifts of $50,000 to his son, and Harriet gave $30,000 to her daughter. What is the total amount of Ozzie's taxable gifts if Ozzie and Harriet elect to split the gifts? |
| | A) | $80,000 |
| | B) | $40,000 |
| | C) | $27,000 |
| | D) | $14,000 |
| | E) | None of the above. |
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| 15 | |
The generation-skipping tax is designed to accomplish which of the following? |
| | A) | generate additional revenues to supplement the gift tax. |
| | B) | replace the estate tax on transfers to trusts. |
| | C) | eliminate the possibility that the gift tax can be avoided by gifts in contemplation of death. |
| | D) | prevent the avoidance of both estate and gift taxes through transfers that skip a generation of recipients. |
| | E) | None of the above. |
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