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HS-330 Real Exam Questions

Fundamentals of Estate Planning Test

400 questions available · Page 1 of 40

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Question 1 Single choice

Which of the following transactions is a taxable gift for federal gift tax purposes?

  1. A

    A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.

  2. 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.

  3. C

    A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.

  4. 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.

Show answer and explanation

Correct answer: A

Question 2 Single choice

Which of the following is an example of a taxable gift for federal gift tax purposes?

  1. A

    Instead of parents paying an outside executive $60,000, a son runs their business for 8 months without charging a fee.

  2. B

    The parents of a married son permit their son and his family to use a summer cottage that rents for
    $3,000 per month on a rent-free basis.

  3. C

    A father cancels a $50,000 note his daughter gave him when he made a loan to her 2 years ago.

  4. D

    A father gives his 19-year-old daughter a note promising to give her his Rolls Royce when she reaches the age of 21.

Show answer and explanation

Correct answer: C

Question 3 Single choice

Which of the following items of property will be included in a decedent's gross estate for federal estate tax purposes?

1. The value of property subject to a general power of appointment that the decedent possessed at death

2. The value of all gratuitous lifetime transfers of property made within 3 years of death

  1. A

    1 only

  2. B

    2 only

  3. C

    Neither 1 nor 2

  4. D

    Both 1 and 2

Show answer and explanation

Correct answer: A

Question 4 Single choice

The decedent, Z, died this year. The facts concerning Z estate are:
- Gross estate $3,200,000
- Marital deduction $1,100,000
- Charitable deduction 80,000
- Gifts made after 1976 115,000
- State death taxes payable 215,000

  1. A

    $1,805,000

  2. B

    $1,920,000

  3. C

    $1,590,000

  4. D

    $1,690,000

Show answer and explanation

Correct answer: A

Question 5 Single choice

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

  1. A

    The deceased spouse's interest in the property qualifies for the marital deduction since it passes outright to the surviving spouse.

  2. B

    In common-law states the total value of the property receives a stepped-up tax basis in the estate of the first spouse to die.

  3. C

    Jointly held property between spouses does not pass through the probate estate of the first spouse to die.

  4. D

    All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse's estate.

Show answer and explanation

Correct answer: B

Question 6 Single choice

All the following are grounds for contesting a will EXCEPT:

  1. A

    The widow was bequeathed less than her intestate share.

  2. B

    The instrument is a forgery.

  3. C

    The testator did not have testamentary capacity.

  4. D

    The testator executed a later valid will.

Show answer and explanation

Correct answer: A

Question 7 Single choice

All the following statements concerning transfers at death under a will are correct EXCEPT:

  1. A

    Specific bequests of a decedent's property are satisfied prior to distribution of the decedent's residuary estate.

  2. B

    If during lifetime a decedent disposed of property that was the subject of a specific bequest, ademption occurs.

  3. C

    It is common for a will to contain a clause that exempts the executor from posting bond.

  4. D

    The most appropriate way to sever a joint tenancy with right of survivorship is for the joint tenant-decedent to make a specific bequest of the property under a will.

Show answer and explanation

Correct answer: D

Question 8 Single choice

Which of the following is an example of a taxable gift for federal gift tax purposes?

  1. A

    The parents of a married son permit their son and his family to use a summer cottage that rents for
    $3,000 per month on a rent-free basis.

  2. B

    A father gives his 19-year-old daughter a note promising to give her his Rolls Royce when she reaches the age of 21.

  3. C

    Instead of parents paying an outside executive $60,000, a son runs their business for 8 months without charging a fee.

  4. D

    A father cancels a $50,000 note his daughter gave him when he made a loan to her 2 years ago.

Show answer and explanation

Correct answer: D

Question 9 Single choice

A person dying without a will loses all the following rights EXCEPT the right to

  1. A

    take maximum advantage of the marital deduction

  2. B

    have assets pass to heirs

  3. C

    give property to a charity

  4. D

    name the person to settle the estate

Show answer and explanation

Correct answer: B

Question 10 Single choice

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?

  1. A

    Wife $12,000, husband $32,000

  2. B

    Wife $32,000, husband $32,000

  3. C

    Wife $22,000, husband $22,000

  4. D

    Wife $44,000, husband 0

Show answer and explanation

Correct answer: C