American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 151:

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

• Question 152:

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

• Question 153:

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

• Question 154:

  A father bought stock for $100,000 and gave it to his son when it was worth $300,000. The father paid no gift tax on the transfer. When the son sold the property 2 years after the gift, his income tax basis was

  A. $300,000
  B. $200,000
  C. $100,000
  C. $100,000

• Question 155:

  Which of the following provisions is (are) generally common to all buy-sell agreements?

  1.

  Provisions for modification of the agreement.

  2.

  Provisions for lifetime business interest transfer restrictions.

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

• Question 156:

  A man died in February of this year. Last year, when he learned that he had a terminal illness, he immediately made the following gifts and filed the required gift tax return: Fair Market Value Gift of listed stock to a

  -qualified charity $100,000

  -

  Gift of listed bonds to his wife 200,000

  -

  Gift of a boat to his son 10,000

  -

  Gift of a sports car to his daughter 10,000

  A. $320,000
  C. $280,000
  D. $ 90,000
  B

• Question 157:

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

  A. The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.
  B. An estate may deduct the value of the remainder interest in a charitable remainder trust.
  C. 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.
  D. The amount of a charitable deduction is reduced by any taxes and administrative expenses chargeable against the bequest.
  A. The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.

• Question 158:

  A father bought stock for $100,000 and gave it to his son when it was worth $300,000. The father paid no gift tax on the transfer. When the son sold the property 2 years after the gift, his income tax basis was

  A. $100,000
  C. $300,000
  D. $200,000
  A. $100,000

• Question 159:

  Which of the following statements concerning a testamentary trust is correct?

  A. It becomes effective only at the death of the grantor.
  B. It saves federal and state death taxes at the death of the grantor.
  C. The trust terms must be included in the will.
  D. The assets in the trust are free of probate costs.
  A. It becomes effective only at the death of the grantor.

• Question 160:

  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

  A. $1,805,000
  B. $1,920,000
  C. $1,590,000
  D. $1,690,000
  A. $1,805,000