A man recently died with only probate assets. Under the terms of his will, he left his entire probate estate outright to his wife. The following are relevant facts concerning the estate:
-Gross estate $2,400,000
-Estate administration expenses 85,000
-Debts of decedent 100,000
-
Allowable funeral expenses 10,000
A.
$2,315,000
B.
$2,205,000
C.
$2,305,000
D.
$2,215,000
All the following are conditions that must be met if an otherwise nonqualified terminable interest is to qualify (as QTIP) for the federal estate tax marital deduction EXCEPT:
A. The surviving spouse must make a qualified disclaimer to all other property in the deceased spouse's estate within 9 months of death.
B. The surviving spouse must be given a lifetime right to receive all the property's income at least annually.
C. The deceased spouse's executor must make an irrevocable election to have the property includible in the surviving spouse's gross estate.
D. No person can be given the right to direct that the property go to anyone other than the surviving spouse as long as the surviving spouse is alive.
A married man died this year leaving a gross estate of $2,750,000. Some additional facts concerning his estate are:
-Administration expenses and debts $ 150,000
-Marital deduction 750,000
-
Applicable credit amount (2005) 555,800
-
Applicable exclusion amount (2005) 1,500,000
-
State death taxes payable 22,200
A.
$163,710
B.
0
C.
$151.490
D.
$147,510
Which of the following statements concerning the joint tenancy with right of survivorship form of real property ownership is (are) correct?
1.
The property is part of the probate estate of the first tenant to die.
2.
An owner can sell his interest in the property at any time without destroying the form of ownership.
A. Both 1 and 2
B. Neither 1 nor 2
C. 1 only
D. 2 only
A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets. Which of the following courses of action will best accomplish these objectives?
A. Make her a gift of enough corporate bonds from his portfolio so that she will be able to support herself from the interest payments
B. Make her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself
C. Purchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her
D. Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds
All the following statements concerning the gift and estate tax chartiable deduction are correct EXCEPT:
A. An estate tax charitable deduction is allowed for the full value of property transferred to a qualified charity but only if the property is included in the donor gross estate.
B. A donor is denied a charitable deduction for property that passes to a qualified charity as the result of a qualified disclaimer if the donor original transfer was to a noncharitable donee.
C. It is possible for a charitable contribution made during the donor lifetime to generate both income and transfer tax deductions for the donor.
D. If the donor retains an interest in property contributed to a qualified charity during lifetime, the value of the property may be included in the donor gross estate.
The estate planning process includes all the following activities EXCEPT
A. the selection of the estate plan by the financial planner
B. evaluating a client's present estate plan
C. gathering a client's family and financial data
D. designing a client's new estate plan
Which of the following statements concerning an installment sale is (are) correct?
1.
Some portion of the purchase price must be paid in any one taxable year other than the year of sale.
2.
Installments due after the seller's death are excludible from the seller's gross estate.
A. 1 only
B. Neither 1 nor 2
C. 2 only
D. Both 1 and 2
Which of the following statements concerning a power of appointment is correct?
A. The time that a special power of appointment may be exercised may not be restricted by the donor when creating the power.
B. A limited power of appointment permits the donee of the power to exercise the power in favor of anyone except the donee's family members.
C. A donee who possesses a special power of appointment at the time of his or her death has the property included in the gross estate.
D. The recipients of the property after the donee exercises the power of appointment are known as the appointees.
Examples of terminable interests that are nondeductible for the federal estate tax marital deduction include which of the following?
1.
A property interest that would pass to someone else if the surviving spouse remarries
2.
A life estate in property that would pass to another person at the death of the surviving spouse
A. 2 only
B. Both 1 and 2
C. Neither 1 nor 2
D. 1 only
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