A woman is the income beneficiary of an irrevocable trust. Which of the following powers given to her will cause all the assets in the trust to be includible in her gross estate for federal estate tax purposes?
A. The testamentary special or limited power to direct the trustee to distribute trust assets to her children
B. The testamentary power to direct the trustee to use trust assets to pay her estate taxes
C. The power each year to direct the trustee to pay her an amount of trust assets not exceeding the greater of $5,000 or 5 percent of the assets held by the trust
D. The power to direct the trustee to pay trust assets to her limited in amount to an ascertainable standard relating to her health and education
All the following powers held by the grantor of an irrevocable trust will cause the trust assets to be brought back into the estate of the grantor EXCEPT the power to
A. terminate the trust
B. add principal to the trust
C. designate who shall enjoy the trust income
D. change the trust remainderpersons
Which of the following statements concerning ownership of property held in trust is (are) correct?
1.
The legal owner of property held in trust is a trustee.
2.
The equitable owner of property held in trust is a beneficiary.
A. 1 only
B. Both 1 and 2
C. Neither 1 nor 2
D. 2 only
All of the following statements concerning the use of an irrevocable life insurance trust to solve liquidity problems of the insured's estate are correct EXCEPT:
A. The grantor is the most appropriate choice for trustee.
B. The grantor can avoid inclusion of the corpus in his or her gross estate.
C. The grantor should avoid obtaining incidents of ownership in the policy.
D. Gift taxes can be avoided for premium contributions made by the grantor.
A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:
-Administration expenses and debts $300,000
-Marital deduction 800,000
-
Applicable credit amount (2005) 555,800
-
Applicable exclusion amount (2005) 1,500,000
-
State death taxes payable 17,700
A.
$42,865
B.
0
C.
$47,065
D.
$37,035
Which of the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship is (are) correct?
1.
Either real or personal property may be owned as a joint tenancy with right of survivorship.
2.
Nonqualified joint tenants with right of survivorship may have unequal separate shares of the property.
A. Neither 1 nor 2
B. Both 1 and 2
C. 1 only
D. 2 only
Which of the following statements concerning the imposition of state death taxes on property owned by a decedent is (are) correct?
1.
Real estate must be taxed in the state where the decedent was domiciled.
2.
Intangible personal property is generally taxed in the state where the decedent was domiciled.
A. 2 only
B. 1 only
C. Neither 1 nor 2
D. Both 1 and 2
A man died in February of this year. Last year, when he learned that he had terminal illness, he immediately made the following gifts and filed the required gift tax return: Fair Market Value Gift of listed stock to a
-qualified charity $200,000
-
Gift of listed bonds to his wife 300,000
-
Gift of a boat to his son 10,000
-
Gift of a sports car to his daughter 10,000
A.
$200,000
B.
0
C.
$290,000
D.
$520,000
All the following items are deductions from a decedent's gross estate in determining his adjusted gross estate EXCEPT
A. state death taxes
B. estate administration expenses
C. claims against the estate
D. attorney fees
Losses resulting from which of the following occurrences constitutes a permissible deduction from a decedent's gross estate to determine the adjusted gross estate?
1.
Unreimbursed losses of estate assets due to theft.
2.
Unreimbursed losses of estate assets due to a storm.
A. Both 1 and 2
B. Neither 1 nor 2
C. 2 only
D. 1 only
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