American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 191:

  All the following statements concerning a power of appointment are correct EXCEPT:

  A. The donee of a power of appointment might be restricted with respect to the time the power can be exercised.
  B. The appointee of a power of appointment is the party who exercises the power.
  C. Failure to exercise a power of appointment is known as a lapse of the power.
  D. The possible recipients of property after the exercise of a power of appointment depend on the terms of the power.
  B. The appointee of a power of appointment is the party who exercises the power.

• Question 192:

  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. Additional facts are:

  -Widower's basis in the real estate $150,000

  -

  Value of real estate when gifted 400,000

  -

  Value of real estate on date of death 800,000

  -

  Amount of gift tax paid by widower 121,800

  A. The gift tax paid is brought back into the widower's gross estate at $121,800.
  B. The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.
  C. The son's income tax basis in the real estate is $800,000.
  D. The widower recognized no gain for income tax purposes at the time the gift was made.
  C. The son's income tax basis in the real estate is $800,000.

• Question 193:

  An executor elects to value the assets of the estate at the alternative valuation date 6 months after death. Which of the following statements concerning the estate tax value of assets included in this estate is correct?

  A. Property sold before the alternate valuation date is valued at the alternate valuation date.
  B. Property that has increased in value since the date of death may be valued at the date of death if the executor so elects.
  C. Property distributed under the will before the alternate valuation date is valued at the date of death.
  D. An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.
  D. An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.

• Question 194:

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

• Question 195:

  Which of the following statements concerning charitable remainder unitrusts is correct?

  A. The remainder interest is paid to the qualified charity after a term of years not greater than 15 years.
  B. A fixed percentage of not less than 10 percent of the net fair market value of the trust assets is paid to the noncharitable beneficiaries.
  C. No further contributions may be made to a unitrust after the initial payment.
  D. The net fair market value of the trust assets are revalued annually.
  D. The net fair market value of the trust assets are revalued annually.

• Question 196:

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

• Question 197:

  A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $900,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm

  the land if it can be included in his father's estate at its current use value. Additional facts are:

  1.Average annual gross rentals from nearby farms of similar acreage are $36,000.

  2.Average annual state and local real estate taxes on the farm are $4,000.

  3.The interest rate for loans from the Federal Land Bank is 8 percent. For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

  A. $600,000
  B. $300,000
  C. $500,000
  D. $400,000
  D. $400,000

• Question 198:

  A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $1,200,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm

  the land if it can be included in his father's estate at its current use value. Additional facts are:

  1.Average annual gross rentals from nearby farms of similar acreage are $56,000.

  2.Average annual state and local real estate taxes on the farm are $8,000.

  3.The interest rate for loans from the Federal Land Bank is 8 percent.

  For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

  A. $700,000
  B. $820,000
  C. $600,000
  D. $500,000
  C. $600,000

• Question 199:

  All the following statements concerning wills are correct EXCEPT:

  A. Once a person is named as an executor in a will, he or she is required to serve.
  B. A codicil is a valid modification of a will.
  C. A testator may lose the capacity to revoke a will prior to death.
  D. In most states a surviving spouse can elect against a will that completely disinherits him or her.
  A. Once a person is named as an executor in a will, he or she is required to serve.

• Question 200:

  An individual who is a resident of State W is also the sole proprietor of a business located in State

  A. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z. Which state will tax the real property used by the proprietorship?
  B. State W
  C. State Z
  D. State X
  E. State Y
  C. State Z