American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 111:

  Which of the following statements concerning the federal income taxation of estates is (are) correct?

  1.

  An estate is entitled to a personal exemption of $300 and a standard deduction.

  2.

  An estate is entitled to a tax deduction for amounts of income distributed.

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

• Question 112:

  Which of the following statements concerning the ownership of real property as joint tenants with right of survivorship is correct?

  A. If the joint tenants are husband and wife, because this is a qualified joint interest, the entire value of the property will be in the estate of the husband regardless of which spouse dies first.
  B. If the joint tenants are brother and sister and the brother contributed all the funds to purchase the property, one-half of the value of the property will be excluded from the sister's estate if she dies first.
  C. 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 to die.
  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.
  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.

• Question 113:

  Mr. Allen died early this year survived by his spouse Mrs. Allen. Among the items of family property are:

  1.A $200,000 life insurance policy on Mr. Allen's life with Mrs. Allen designated as beneficiary. Mrs. Allen has been the owner of the policy ever since it was issued 4 years ago.

  2.The family residence with a fair market value of $300,000. Mr. and Mrs. Allen own the residence jointly with the right of survivorship even though Mr. Allen purchased it with his separate funds. 3.A $20,000 bank account. Mr. and Mrs. Allen

  own the account jointly with the right of survivorship even though Mrs. Allen made all the deposits.

  What amount of the family property will be included in Mr. Allen's gross estate for federal estate tax purposes?

  A. $360,000
  B. $300,000
  C. $160,000
  D. $350,000
  C. $160,000

• Question 114:

  All the following assets owned by a decedent pass by operation of law or by contract EXCEPT

  A. death benefits of a pension plan payable to a named beneficiary
  B. life insurance payable to a named beneficiary
  C. probate assets passing under the terms of a valid will
  D. jointly owned real estate passing to the surviving joint tenant
  C. probate assets passing under the terms of a valid will

• Question 115:

  All the following statements concerning the generation-skipping transfer tax (GSTT) are correct EXCEPT:

  A. All donors have a cumulative $1.5 million exemption against generation-skipping transfers.
  B. The tax is imposed according to a graduated rate schedule similar to the federal estate and gift tax rates.
  C. The tax may be imposed on direct gifts to grandchildren.
  D. The tax may be imposed on gifts in trust to grandchildren.
  B. The tax is imposed according to a graduated rate schedule similar to the federal estate and gift tax rates.

• Question 116:

  A woman is the income beneficiary of an irrevocable trust. All the following powers held by her will cause all the assets in the trust to be includible in her gross estate for federal estate tax purposes EXCEPT

  A. the testamentary power to direct the trustee to pay trust assets to her estate
  B. the testamentary special or limited power to direct the trustee to distribute trust assets to her children
  C. the testamentary power to direct the trustee to use trust assets to pay her estate taxes D. the power to direct the trustee to distribute trust corpus to her
  B. the testamentary special or limited power to direct the trustee to distribute trust assets to her children

• Question 117:

  Nontax benefits of lifetime gifts include all the following EXCEPT to

  A. reduce probate and administrative costs
  B. provide for the education of the donee
  C. avoid claims of creditors evidenced by liens
  D. obtain privacy that is not possible to obtain through testamentary transfers
  C. avoid claims of creditors evidenced by liens

• Question 118:

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

• Question 119:

  Income earned but unpaid at the time of a decedent's death is deemed to be income in respect of a decedent (IRD). All the following statements concerning IRD are correct EXCEPT:

  A. The income must be reported on the decedent's final federal income tax return.
  B. IRD includes sales commissions earned prior to the decedent's death and paid to the estate according to the intestacy laws.
  C. The income is taxable to the person or entity receiving it.
  D. The income may be included on both the estate tax return and the estate income tax return with a corresponding deduction.
  A. The income must be reported on the decedent's final federal income tax return.

• Question 120:

  Which of the following statements concerning a general power of appointment is (are) correct?

  1.

  A general power of appointment is a power over property so broad that it approaches actual ownership or control over the property subject to the power.

  2.

  The property subject to a general power of appointment will be includible in the gross estate of the holder of the power if held until death.

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