Which of the following statements concerning both the joint tenancy with right of survivorship and the tenancy by the entirety forms of real property ownership is correct?
A. Both forms of ownership are restricted to two equal owners at any one time.
B. Both forms of ownership provide that an owner can sell his interest in the property at any time without destroying the form of ownership.
C. Both forms of ownership provide that a deceased owner's interest passes to the surviving owner.
D. Both forms of ownership are restricted to husband and wife.
When the owner of a closely held business dies, the payment of a portion of the federal estate tax may be deferred for a period of several years if the estate otherwise qualifies under the provisions of IRC Section 6166. Which of the following statements concerning this deferral of federal estate tax is correct?
A. To qualify for the tax deferral, the closely held business must represent more than 50 percent of the value of the decedent's adjusted gross estate.
B. Under certain circumstances, the estate will forfeit its right to tax deferral, and all the remaining unpaid estate tax will become due and payable immediately.
C. The interest on the unpaid estate tax is payable over the first 10 years, after which the tax plus interest on the balance is payable in equal installments for the last 5 years.
D. The interest rate on the deferred tax is determined by the prime rate in effect on the date of death.
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 $1,700,000
-Estate administration expenses 30,000
-Debts of decedent 65,000
-
Allowable funeral expenses 5,000
A.
$1,635,000
B.
$1,695,000
C.
$1,665,000
D.
$1,600,000
Many trust instruments provide for the removal of the original trustee. Valid reasons for removing the original trustee include which of the following?
1.
A shift in trust situs is desirable because of changes in law.
2.
The beneficiary has moved his or her residence to a distant state.
A. Neither 1 nor 2
B. 1 only
C. 2 only
D. Both 1 and 2
Which of the following transactions is a taxable gift for federal gift tax purposes?
A. A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.
B. A grandmother purchased a U.S. savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.
C. A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.
D. A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.
An executor may value assets as of the date of death or the alternate valuation date 6 months after death. Assuming the executor elects the alternate valuation date, all the following statements are correct EXCEPT:
A. Property distributed under the will within the alternate valuation period is valued at the date of death.
B. Property sold by the executor before the alternate valuation date is valued at its sale price.
C. A property interest that diminishes with the mere passage of time, such as a patent, is includible at the date of death value.
D. Property that has increased in value since the date of death is valued at the alternate valuation date.
A widower dies leaving a net probate estate of $300,000. At the time of his death, his descendants are as follows:
-
A son, Joe, who has no children;
-
A deceased daughter, Mary, whose two children, Irene and Sally, survive; and
-
A daughter, Anne, who has one child, Harry
A.
$100,000 to Joe, $50,000 to Irene, $50,000 to Sally, $50,000 to Anne, and $50,000 to Harry
B.
$100,000 to Joe, $50,000 to Irene, $50,000 to Sally, and $100,000 to Anne
C.
$60,000 to Joe, $60,000 to Irene, $60,000 to Sally, $60,000 to Anne, and $60,000 to Harry
D.
$75,000 to Joe, $75,000 to Irene, $75,000 to Sally, and $75,000 to Anne
Which of the following statements concerning the obligation of the personal representative of a decedent to file a federal estate tax return is (are) correct?
1.
A return must be filed by a decedent's estate if the gross estate plus adjusted taxable gifts equals the applicable exclusion amount or more, even though no federal estate tax is due.
2.
Unless extensions are granted, the return must be filed and the tax paid within 9 months of the decedent's death.
A. 1 only
B. Neither 1 nor 2
C. Both 1 and 2
D. 2 only
Generally the courts will accept as the federal estate tax value of a closely held corporate business the price established by a buy-sell agreement if all the following conditions are met EXCEPT:
A. The agreement requires a deceased shareholder's executor to sell the stock at the price specified in the agreement.
B. The agreement as to per-share value is fair, adequate, and made at arm's length.
C. The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.
D. The agreement requires a shareholder to first offer his stock to the corporation or other shareholders at the specified price if he wishes to sell it during his lifetime.
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. 1 only
B. Neither 1 nor 2
C. 2 only
D. Both 1 and 2
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