American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 161:

  All the following are proper actions on the part of a trustee EXCEPT

  A. placing cash from the sale of securities in a non-interest bearing checking account for an extended period of time
  B. investing trust assets in speculative securities in accordance with the provisions of the trust instrument
  C. purchasing securities in good faith from a third party just prior to a sharp decrease in their value
  D. purchasing assets for personal use from the trust at their fair market value with the approval of all beneficiaries
  A. placing cash from the sale of securities in a non-interest bearing checking account for an extended period of time

• Question 162:

  Which of the following statements concerning the imposition of state death taxes on property owned by a decedent is (are) correct?

  1.

  Real estate must be taxed in the state where the decedent was domiciled.

  2.

  Intangible personal property is generally taxed in the state where the decedent was domiciled.

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

• Question 163:

  Which of the following statements concerning executors is correct?

  A. An executor can be given broad and discretionary powers with respect to the management of the estate.
  B. All executors must post bonds.
  C. The executor must be a licensed attorney in the decedent's state of domicile.
  D. The executor named in the will of a deceased person is automatically authorized to act.
  A. An executor can be given broad and discretionary powers with respect to the management of the estate.

• Question 164:

  All the following statements concerning revocable trusts are correct EXCEPT:

  A. A transfer to a revocable trust is treated as an incomplete gift for gift tax purposes.
  B. A transfer to a revocable trust changes the income tax picture of the grantor.
  C. Property transferred to a revocable trust typically avoids being included in the probate estate of the grantor.
  D. Revocable trusts are created and operate before the death of the settlor.
  B. A transfer to a revocable trust changes the income tax picture of the grantor.

• Question 165:

  The decedent, D, died this year. The facts concerning D estate are:

  -Gross estate $3,400,000

  -Marital deduction 0

  -Charitable deduction 600,000

  -Funeral and administration expenses 80,000

  -Gifts made after 1976 170,000

  -

  State death taxes payable 192,000

  A. $2,720,000
  B. $2,358,000
  C. $2,138,000
  D. $2,528,000
  D. $2,528,000

• Question 166:

  A father is considering giving his daughter a gift. For tax planning purposes, the father should give his daughter which of the following?

  A. Raw land that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation
  B. A bond that cost him $15,000 and is now worth $10,000
  C. Real estate that cost him $40,000 and is now worth $120,000, subject to a $110,000 mortgage
  D. Stock that cost him $10,000 and which now has a fair market value of $20,000
  A. Raw land that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation

• Question 167:

  Which of the following statements concerning the generation-skipping transfer tax (GSTT) is (are) correct?

  -

  An annual exclusion against GSTT will shelter gifts by a grandparent to a trust benefitting multiple grandchildren.

  -

  Tuition payments made directly by a grandparent to a university for a grandchild's education are exempt from GSTT.

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

• Question 168:

  Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?

  1.

  Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.

  2.

  Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.

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

• Question 169:

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

  A. the value of property subject to a general power of appointment that the decedent possessed at death
  B. the value of a gratuitous lifetime transfer in which the decedent retained a reversionary interest on the date of death worth more than 5 percent of the value of the property and which the donee must survive the decedent to possess
  C. the value of a gratuitous lifetime transfer in which the decedent retained the right for life to receive the income from the property
  D. the value of all gratuitous lifetime transfers of property made within 3 years of death
  D. the value of all gratuitous lifetime transfers of property made within 3 years of death

• Question 170:

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