American College American College Certifications HS330 Questions & Answers

• Question 261:

  To determine whether a taxable gift has been made, the Treasury Regulations require that there must initially be a definite finding that the

  A. donor was a close friend or a relative of the donee

  B. property was transferred for less than an adequate and full consideration in money or money's worth

  C. transferor's actual state of mind was such that he intended to make a gift

  D. property transferred was real property or tangible personal property

  Correct Answer: B

• Question 262:

  Which of the following statements concerning charitable remainder annuity trusts is correct?

  A. The term of charitable remainder annuity arrangements is limited to 10 years.

  B. It provides a fixed annuity income interest to a qualified charity.

  C. The donor receives an estate tax charitable deduction for the value of the remainder interest.

  D. The interest paid to the charity must be paid at least quarterly.

  Correct Answer: C

• Question 263:

  Believing that his death was imminent, a widower gave his son some real estate two years ago and filed a timely gift tax return. The widower died on January 1st of this year. The additional facts are:

  -Widower's basis in the real estate $400,000

  -

  Value of the real estate when gifted 1,000,000

  -

  Value of the real estate on date of death 2,000,000

  -

  Amount of gift tax paid by widower 345,800

  A.

  The son's income tax basis in the real estate is $2,000,000.

  B.

  The widower recognized no gain for income tax purposes at the time the gift was made.

  C.

  The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.

  D.

  The gift tax paid is brought back into the widower's gross estate at $345,800.

  Correct Answer: A

• Question 264:

  Which of the following statements concerning estates and trusts is (are) correct?

  -Both estates and trusts come into being by operation of law.

  -

  The personal representative of an estate and the trustee have similar fiduciary responsibilities.

  A.

  Both 1 and 2

  B.

  Neither 1 nor 2

  C.

  1 only

  D.

  2 only

  Correct Answer: D

• Question 265:

  Which of the following statements concerning the inclusion and valuation of all or part of a commercial annuity in the estate of an annuitant is correct?

  A. A life annuity with a period certain is includible to the extent of the present value of any remaining guaranteed payments.

  B. A joint and survivor annuity is includible to the extent that the survivor paid the purchase price of the contract.

  C. An annuity is includible to the extent of the value determined by the special 10-year averaging rule.

  D. If the executor elects the alternate valuation date, an annuity is includible at its replacement cost 6 months after death.

  Correct Answer: A

• Question 266:

  All the following statements concerning property ownership by a married couple residing in a community-property state are correct EXCEPT:

  A. Income earned by one spouse becomes community property.

  B. Property inherited during the marriage is the separate property of the spouse who inherited it.

  C. All property that is not separate property is community property.

  D. Community property loses its identity when a community-property couple moves to a common- law state.

  Correct Answer: D

• Question 267:

  Which of the following statements concerning guardians is (are) correct?

  1.

  A guardian is appointed by a court.

  2.

  A guardian holds equitable title to the property he administers for his or her ward.

  A. Both 1 and 2

  B. 2 only

  C. Neither 1 nor 2

  D. 1 only

  Correct Answer: D

• Question 268:

  All the following statements concerning the ownership of real property as joint tenants with right of survivorship are correct EXCEPT:

  A. If the joint tenants are husband and wife, because this is a qualified joint interest, one half the value of the property will be in the estate of the first spouse to die regardless of which spouse contributed to the purchase price.

  B. If three sisters inherited property as joint tenants with right of survivorship, the entire value of the property will be in the estate of the first sister to die.

  C. If the joint tenants are brother and sister, no portion of the value of the property will be in the sister's estate if she dies first provided her executor proves that the brother contributed all the funds.

  D. If the joint tenants are two brothers and each contributed one half the property's purchase price, only one half the property's value will be in the estate of the first brother to die if his executor proves that the other brother contributed half of the purchase price.

  Correct Answer: B

• Question 269:

  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

  Assuming that the widower's will provides for the distribution of his assets in equal shares to his children, per stirpes, which of the following correctly states the amounts each descendant will receive?

  A. $60,000 to Joe, $60,000 to Irene, $60,000 to Sally, $60,000 to Anne, and $60,000 to Harry

  B. $75,000 to Joe, $75,000 to Irene, $75,000 to Sally, and $75,000 to Anne

  C. $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, and $100,000 to Anne

  D. $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, $50,000 to Anne, and $50,000 to Harry

  Correct Answer: C

• Question 270:

  All the following statements concerning qualification of property for the federal estate tax marital deduction are correct EXCEPT:

  A. The property interest passing to the surviving spouse must be includible in the decedent's gross estate.

  B. The property received by a surviving spouse after a successful will contest fails to qualify.

  C. The property interest must be includible in the surviving spouse's estate at death unless consumed or given away.

  D. The surviving spouse must receive the property as the beneficial owner rather than as a trustee for someone else.

  Correct Answer: B