American College American College Certifications HS-330 Questions & Answers

• Question 191:

  Which of the following areas of consideration present common ethical issues for the estate planner?

  A. Consistency

  B. Compatibility

  C. Compensation

  D. Contracts

  Correct Answer: C

• Question 192:

  Which of the following statements concerning pooled-income funds is (are) correct?

  1.

  A pooled income fund is similar to a mutual fund maintained by a qualified charity.

  2.

  It is an irrevocable arrangement in which the remainder interest passes to charity.

  A. Both 1 and 2

  B. 2 only

  C. Neither 1 nor 2

  D. 1 only

  Correct Answer: A

• Question 193:

  A wife makes outright gifts of $66,000 this year to her son, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?

  A. Wife $12,000, husband $32,000

  B. Wife $32,000, husband $32,000

  C. Wife $22,000, husband $22,000

  D. Wife $44,000, husband 0

  Correct Answer: C

• Question 194:

  If a grantor establishes an irrevocable trust, the income of the trust will be taxed to the grantor if it is used to pay premiums for life insurance on the life of

  A. the spouse of the grantor

  B. the father of the grantor

  C. a child of the grantor

  D. a grandchild of the grantor

  Correct Answer: A

• Question 195:

  All the following statements concerning a grantor-retained unitrust (GRUT) are correct EXCEPT: A. When the grantor dies during the retained interest term, the estate tax benefits are increased.

  B. When the trust is created, the grantor makes an irrevocable transfer to remainderperson(s).

  C. The transfer of the remainder interest in the trust is a current gift for gift tax purposes.

  D. The grantor's applicable credit amount may be applied to the gifted remainder interest in the trust.

  Correct Answer: A

• Question 196:

  Nontax benefits of lifetime gifts include all the following EXCEPT to

  A. reduce probate and administrative costs

  B. avoid claims of creditors evidenced by liens

  C. provide for the education of the donee

  D. obtain privacy that is not possible to obtain through testamentary transfers

  Correct Answer: B

• Question 197:

  All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT

  A. a gratuitous transfer of real property to a revocable inter vivos trust

  B. a gratuitous transfer of real property with a reserved right to use and enjoy it for life

  C. the gift taxes paid last year on a gratuitous transfer of real property

  D. an outright, gratuitous transfer of real property in contemplation of death

  Correct Answer: D

• Question 198:

  Which of the following statements concerning property is correct?

  A. A tree growing on land is tangible personal property.

  B. A mortgage on real estate is real property.

  C. Any property that is not real property is personal property.

  D. A bond issue secured solely by a corporation assets is tangible personal property.

  Correct Answer: C

• Question 199:

  Which of the following factors is (are) used to make a choice between having an entity-purchase or cross-purchase partnership buy-sell agreement?

  1.

  The cost basis of the partners' business interests.

  2.

  The amount of the partners?individual personal net worths.

  A. 2 only

  B. 1 only

  C. Both 1 and 2

  D. Neither 1 nor 2

  Correct Answer: B

• Question 200:

  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 about the estate:

  -Gross estate $2,000,000

  -Estate administration expenses 50,000

  -Debts of decedent 200,000

  -

  Allowable funeral expenses 5,000

  A.

  $1,750,000

  B.

  $1,745,000

  C.

  $1,795,000

  D.

  $1,800,000

  Correct Answer: B