American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 171:

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

  A. A bond that cost him $25,000 and is now worth $10,000
  B. Securities that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation
  C. Raw land that cost him $1,000 and which now has a fair market value of $14,000
  D. Real estate that cost him $30,000 and is now worth $110,000, subject to a $100,000 mortgage
  B. Securities that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation

• Question 172:

  Many trust instruments provide for the removal of the original trustee. All the following are valid reasons for removal of a trustee EXCEPT:

  A. A shift in trust situs is desirable because of changes in law.
  B. The beneficiary is not able to get along with the present corporate trustee.
  C. The beneficiary has moved his or her residence to a distant state.
  D. The beneficiary has been successful with investments and wants to manage the trust assets.
  D. The beneficiary has been successful with investments and wants to manage the trust assets.

• Question 173:

  To determine whether a taxable gift has been made, the Treasury Regulations require that there must initially be a definite finding that the

  A. donor was a close friend or a relative of the donee
  B. property was transferred for less than an adequate and full consideration in money or money's worth
  C. transferor's actual state of mind was such that he intended to make a gift
  D. property transferred was real property or tangible personal property
  B. property was transferred for less than an adequate and full consideration in money or money's worth

• Question 174:

  All the following items are deductions from a decedent's gross estate in determining his adjusted gross estate EXCEPT

  A. state death taxes
  B. estate administration expenses
  C. claims against the estate
  D. attorney fees
  A. state death taxes

• Question 175:

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

  A. The applicable credit amount may be applied against generation-skipping transfers.
  B. An annual exclusion is available for direct skip gifts to a grandchild.
  C. The GSTT is inapplicable to transfers to nonrelated transferees.
  D. The GSTT is imposed only if no federal estate or gift tax applies to a transfer.
  B. An annual exclusion is available for direct skip gifts to a grandchild.

• Question 176:

  Which of the following acts by a person other than a lawyer is (are) clearly an unauthorized practice of law?

  1.

  A trust officer gives a client advice about the taxation of a trust.

  2.

  A CPA designs an estate plan for presentation to a client.

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

• Question 177:

  Which of the following statements concerning marital transfers to a non-U.S. citizen spouse is (are) correct?

  1.

  A marital deduction is automatically available as long as property is transferred outright to the non-citizen spouse.

  2.

  A marital deduction is automatically available if the transferor-decedent spouse is a U. S. citizen.

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

• Question 178:

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

  A. 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 sister to die.
  B. If the joint tenants are husband and wife, because this is a qualified joint interest, one half the value of the property will be in the estate of the first spouse to die regardless of which spouse contributed to the purchase price.
  C. 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 brother and sister, no portion of the value of the property will be in the sister's estate if she dies first provided her executor proves that the brother contributed all the funds.
  A. 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 sister to die.

• Question 179:

  A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1,500,000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. All the following statements concerning this action are correct EXCEPT:

  A. At the husband's death, his heirs would get a fully stepped-up tax basis for the property.
  B. At the husband's death, it would be easier to qualify his estate for an IRC Section 303 stock redemption of his business interest.
  C. If the husband dies first and leaves the office building outright to his wife, there would be no federal estate tax attributed to its inclusion in his gross estate.
  D. If the husband dies first, the probate costs of his estate could be increased.
  B. At the husband's death, it would be easier to qualify his estate for an IRC Section 303 stock redemption of his business interest.

• Question 180:

  In which of the following situations will the grantor be taxed on income from trust property.

  1.

  The grantor of a trust gives one of the trust beneficiaries the right to add or delete beneficiaries.

  2.

  An adverse party to the grantor holds the power to determine the timing of trust distributions to the beneficiaries.

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