American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 181:

  Tax benefits of making lifetime gifts in excess of the gift tax annual exclusion include all the following EXCEPT:

  A. Gift taxes are payable at the same tax rate as estate taxes.
  B. Income taxes can be saved if a high-income donor gives income-producing property to a low- income donee.
  C. The gift tax paid on a gift made more than 3 years prior to the death of the donor avoids inclusion the donor's gross estate.
  D. Appreciation in the value of a gift of real property after the date of the gift increases the donor's federal estate tax liability.
  D. Appreciation in the value of a gift of real property after the date of the gift increases the donor's federal estate tax liability.

• Question 182:

  To qualify the seller of property for installment sale tax treatment, the transaction must meet which of the following conditions?

  A. There must be no more than ten installments.
  B. All installments must be in equal amounts of principal.
  C. At least 30 percent of the purchase price must be paid in the year of sale.
  D. The entire purchase price must not be paid in the taxable year of sale.
  D. The entire purchase price must not be paid in the taxable year of sale.

• Question 183:

  Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?

  1.

  Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stirpes

  2.

  Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate

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

• Question 184:

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

• Question 185:

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

  -

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

  -

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

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

• Question 186:

  Which of the following statements concerning filing the federal estate tax return is correct?

  A. A one-year extension for filing the estate tax return is granted when the estate contains a closely held business interest.
  B. An automatic two-year extension for filing the estate tax return is granted when the decedent dies overseas.
  C. The estate tax return must be filed within 9 months of death unless an extension is granted by the IRS.
  D. For persons dying under current law, an estate tax return must be filed for all U.S. citizen decedents.
  C. The estate tax return must be filed within 9 months of death unless an extension is granted by the IRS.

• Question 187:

  Which of the following statements concerning property ownership by a married couple residing in a community-property state is correct?

  A. All property owned by the couple is community property.
  B. Property inherited by one spouse during a marriage becomes community property.
  C. Community property loses its identity when a couple moves from a community-property state to a common-law state.
  D. Income earned by one spouse becomes community property.
  D. Income earned by one spouse becomes community property.

• Question 188:

  Which of the following statements concerning an installment sale is (are) correct?

  1.

  Some portion of the purchase price must be paid in any one taxable year other than the year of sale.

  2.

  Installments due after the seller's death are excludible from the seller's gross estate.

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

• Question 189:

  Examples of terminable interests that are nondeductible for the federal estate tax marital deduction include which of the following?

  -

  A property interest that would pass to someone else if the surviving spouse remarries

  -

  A life estate in property that would pass to another person at the death of the surviving spouse

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

• Question 190:

  Believing that his death was imminent, a widower gave his son some real estate two years ago and filed a timely gift tax return. The widower died on January 1st of this year. The additional facts are:

  -Widower's basis in the real estate $400,000

  -

  Value of the real estate when gifted 1,000,000

  -

  Value of the real estate on date of death 2,000,000

  -

  Amount of gift tax paid by widower 345,800

  A. The son's income tax basis in the real estate is $2,000,000.
  B. The widower recognized no gain for income tax purposes at the time the gift was made.
  C. The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.
  D. The gift tax paid is brought back into the widower's gross estate at $345,800.
  A. The son's income tax basis in the real estate is $2,000,000.