American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 211:

  Which of the following types of real property ownership will be deemed to be a tenancy in common?

  A. Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.
  B. Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.
  C. Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.
  D. Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.
  B. Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.

• Question 212:

  A father plans to create a trust for the benefit of his 22-year-old son and wishes to take advantage of the gift tax annual exclusion. He has named a bank as trustee. Which of the following trust provisions would cause the gifts to be ineligible to qualify for the gift tax annual exclusion?

  1.

  The trust income is to be paid to the son or accumulated at the discretion of the trustee.

  2.

  The income is to be accumulated until the son reaches age 32 when all accumulated income and principal are to be distributed to him.

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

• Question 213:

  For estate tax purposes which of the following is (are) a form of charitable gifts that may qualify for the charitable deduction?

  -Split gifts

  -

  Charitable remainder trusts

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

• Question 214:

  Which of the following statements concerning the joint tenancy with right of survivorship form of real property ownership is (are) correct?

  1.

  The property is part of the probate estate of the first tenant to die.

  2.

  An owner can sell his interest in the property at any time without destroying the form of ownership.

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

• Question 215:

  Which of the following statements concerning the estate tax marital deduction is correct?

  A. The marital deduction available to a decedent in a community-property state is equal to the total amount of community property.
  B. The marital deduction available to a decedent in a common-law state is equal to the net amount of qualifying property passing to the surviving spouse.
  C. The marital deduction available to a decedent in a common-law state is limited to a maximum of $1 million.
  D. The marital deduction available to a decedent in a common-law state is equal to one half the adjusted gross estate.
  B. The marital deduction available to a decedent in a common-law state is equal to the net amount of qualifying property passing to the surviving spouse.

• Question 216:

  An executor may value assets as of the date of death or the alternate valuation date 6 months after death. Assuming the executor elects the alternate valuation date, all the following statements are correct EXCEPT:

  A. Property distributed under the will within the alternate valuation period is valued at the date of death.
  B. Property sold by the executor before the alternate valuation date is valued at its sale price.
  C. A property interest that diminishes with the mere passage of time, such as a patent, is includible at the date of death value.
  D. Property that has increased in value since the date of death is valued at the alternate valuation date.
  A. Property distributed under the will within the alternate valuation period is valued at the date of death.

• Question 217:

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

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

• Question 218:

  A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:

  -Administration expenses and debts $300,000

  -Marital deduction 800,000

  -

  Applicable credit amount (2005) 555,800

  -

  Applicable exclusion amount (2005) 1,500,000

  -

  State death taxes payable 17,700

  A. $47,065
  B. $42,865
  D. $37,035
  D. $37,035

• Question 219:

  Under the terms of his will, a man left his residuary estate to a testamentary trust for the benefit of his wife. Which of the following powers with respect to the trust will cause all the trust principal to be includible in the gross estate of the widow for federal estate tax purposes?

  A. The power of the widow to direct the trustee to use trust assets to pay her personal debts
  B. The power of the trustee in its sole discretion to distribute trust assets to the widow for any reason satisfactory to the trustee
  C. The testamentary limited or special power of the widow to direct the trustee to distribute trust assets to her heirs.
  D. The power of the widow each year to direct the trustee to pay her the greater of 5 percent of the trust principal or $5,000
  A. The power of the widow to direct the trustee to use trust assets to pay her personal debts

• Question 220:

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