American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 1:

  The following are facts concerning a decedent's estate:

  -Taxable estate $1,800,000

  -Pre-1977 taxable gifts 100,000

  -

  Post-1976 adjusted taxable gifts 150,000

  -

  Post-1976 gifts made to a qualified charity 200,000

  A. $1,800,000
  B. $1,950,000
  C. $1,650,000
  D. $2,150,000
  B. $1,950,000

• Question 2:

  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.
  C. Both forms of ownership provide that a deceased owner's interest passes to the surviving owner.

• Question 3:

  Which of the following statements concerning a power of appointment is correct?

  A. The time that a special power of appointment may be exercised may not be restricted by the donor when creating the power.
  B. A limited power of appointment permits the donee of the power to exercise the power in favor of anyone except the donee's family members.
  C. A donee who possesses a special power of appointment at the time of his or her death has the property included in the gross estate.
  D. The recipients of the property after the donee exercises the power of appointment are known as the appointees.
  D. The recipients of the property after the donee exercises the power of appointment are known as the appointees.

• Question 4:

  All the following statements concerning a federal estate tax deduction for a bequest or gift to a qualified charity are correct EXCEPT:

  A. A life insurance policy that was assigned to a charity as a gift less than 3 years prior to the insured's death qualifies for a charitable deduction.
  B. The amount of a charitable deduction is reduced by any taxes and administrative expenses chargeable against the bequest.
  C. The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.
  D. An estate may deduct the value of the remainder interest in a charitable remainder trust.
  C. The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.

• Question 5:

  Requirements for property to qualify for the federal estate tax marital deduction include which of the following?

  1.

  The property interest must be includible in the decedent's gross estate.

  2.

  The property must pass in such manner that it will be includible in the surviving spouse's estate at death unless consumed or given away.

  A. 1 only
  B. Both 1 and 2
  C. Neither 1 nor 2
  D. 2 only
  B. Both 1 and 2

• Question 6:

  A man is planning to establish and fund an irrevocable trust for the benefit of his two sons, ages 19 and 22, and plans to give the trustee power to sprinkle trust income. From the standpoint of providing federal income, gift, and estate tax savings, which of the following would be a suitable trustee?

  1.

  The grantor of the trust

  2.

  The grantor's 22-year-old son

  A. Neither 1 nor 2
  B. 1 only
  C. Both 1 and 2
  D. 2 only
  A. Neither 1 nor 2

• Question 7:

  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
  D. Both 1 and 2

• Question 8:

  If a grantor establishes an irrevocable trust, the income of the trust will be taxed to the grantor if it is used to pay premiums for life insurance on the life of

  A. the spouse of the grantor
  B. the father of the grantor
  C. a child of the grantor
  D. a grandchild of the grantor
  A. the spouse of the grantor

• Question 9:

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

  A. Jointly held property between spouses does not pass through the probate estate of the first spouse to die.
  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.
  C. All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse's estate.
  D. The deceased spouse's interest in the property qualifies for the marital deduction since it passes outright to the surviving spouse.
  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.

• Question 10:

  Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?

  A. It is a form of property ownership available only to married persons.
  B. It is a form of property ownership that applies only to personal property.
  C. One tenant can freely transfer his or her property interest to a third person.
  D. The property will be in the probate estate of the first joint tenant to die.
  A. It is a form of property ownership available only to married persons.