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 $22,000, husband $22,000
B. Wife $44,000, husband 0
C. Wife $12,000, husband $32,000
D. Wife $32,000, husband $32,000
A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $1,200,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm the land if it can be included in his father's estate at its current use value. Additional facts are:
1.Average annual gross rentals from nearby farms of similar acreage are $56,000.
2.Average annual state and local real estate taxes on the farm are $8,000.
3.The interest rate for loans from the Federal Land Bank is 8 percent.
For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of
A. $700,000
B. $820,000
C. $600,000
D. $500,000
Which of the following statements concerning the gift or estate tax charitable deduction is (are) correct?
1.
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.
2.
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.
A. 2 only
B. 1 only
C. Both 1 and 2
D. Neither 1 nor 2
Which of the following statements concerning the valuation of intangible personal property in the gross estate of a decedent is correct?
A. If there were no trades of a listed common stock on the date of the stockholder's death, the stock's value is based on its average daily price for the previous month prior to the shareholder's death.
B. Certain U.S. Treasury bonds that are used to pay federal estate taxes at par are valued at their market price on the date of death of the owner.
C. When a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the "blockage" rule.
D. Valuing closely held stock requires the consideration of several factors outlined by IRS rulings.
All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:
A. A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.
B. A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild's parents are still alive.
C. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.
D. A termination of a trust at the death of the nonskip life income beneficiary with the remainder distributed solely to skip persons.
A taxable gift has been made in which of the following situations?
1.
A father manages his disabled son's business for a year without compensation since a replacement manager would have cost $25,000.
2.
A father verbally promises his 21-year-old daughter that he will give her his antique Mercedes when she graduates from college next year.
A. 2 only
B. Neither 1 nor 2
C. Both 1 and 2
D. 1 only
The Decedent, T, died this year. The facts concerning T estate are:
-Gross estate $2,700,000
-Marital deduction 900,000
-Charitable deduction 110,000
-Gifts made after 1976 130,000
-
State death taxes payable 165,000
A.
$1,395,000
B.
$1,285,000
C.
$1,655,000
D.
$1,525,000
All the following are grounds for contesting a will EXCEPT:
A. The testator executed a later valid will.
B. The instrument is a forgery.
C. The widow was bequeathed less than her intestate share.
D. The testator did not have testamentary capacity.
Which of the following statements concerning charitable guaranteed annuity interests is (are) correct?
1.
To qualify for an estate tax charitable deduction, guaranteed annuity interests must be made in trust.
2.
These interests refer to the charity right to receive a determinable income amount at least annually for a specific term or life (lives) or one or more noncharitable beneficiaries.
A. Both 1 and 2
B. Neither 1 nor 2
C. 2 only
D. 1 only
Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?
1.
Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.
2.
Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.
A. Neither 1 nor 2
B. Both 1 and 2
C. 1 only
D. 2 only
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