American College American College Certifications HS-330 Questions & Answers

• Question 211:

  A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required EXCEPT:

  A. His refusal to accept the inheritance must be received by the executor of his father's estate within 9 months of his father's death.

  B. He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.

  C. His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

  D. His refusal to accept the inheritance must be in writing.

  Correct Answer: C

• Question 212:

  All the following statements concerning an estate for a term of years are correct EXCEPT:

  A. An interest may extend beyond the lifetime of the grantor.

  B. The tenant may transfer the property at the end of the term of his interest.

  C. The tenant has the right to possess the property during the term of his interest.

  D. It is an interest in property established for a specific duration.

  Correct Answer: B

• Question 213:

  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 an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds

  C. 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

  D. Purchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her

  Correct Answer: C

• Question 214:

  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.

  Correct Answer: C

• Question 215:

  Which of the following statements concerning the generation-skipping transfer tax (GSTT) is correct?

  A. The applicable credit amount may be applied against generation-skipping transfers.

  B. An annual exclusion is available for direct skip gifts to a grandchild.

  C. The GSTT is inapplicable to transfers to nonrelated transferees.

  D. The GSTT is imposed only if no federal estate or gift tax applies to a transfer.

  Correct Answer: B

• Question 216:

  The primary objective in estate planning is to

  A. preserve the marital deduction and applicable credit amount credit

  B. reflect accurately the client's wishes concerning the disposition of his or her wealth

  C. reduce estate taxes to the lowest amount possible

  D. prevent the intestate distribution of assets

  Correct Answer: B

• Question 217:

  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. Neither 1 nor 2

  B. 1 only

  C. Both 1 and 2

  D. 2 only

  Correct Answer: C

• Question 218:

  All the following statements concerning a complex trust are correct EXCEPT:

  A. Beneficiaries must receive all distributable net income in the year received by the trust.

  B. The trustee may make distributions of principal to trust beneficiaries.

  C. A complex trust may make gifts to charity.

  D. Beneficiaries are taxed on their share of distributable net income when received by them.

  Correct Answer: A

• Question 219:

  An individual who is a resident of State W is also the sole proprietor of a business located in State

  A. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z. Which state will tax the real property used by the proprietorship?

  B. State X

  C. State W

  D. State Z

  E. State Y

  Correct Answer: A

• Question 220:

  All the following items are allowed as a deduction from a decedent's gross estate to determine the decedent's adjusted gross estate EXCEPT:

  A. Payments of estate debts.

  B. Expenses incurred in the presentation of probate assets.

  C. Costs of distributing probate assets to estate beneficiaries.

  D. Expenses incurred for the benefit of individual heirs.

  Correct Answer: D