American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 241:

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

• Question 242:

  All the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship are correct EXCEPT:

  A. Joint tenants need not be related either by blood or marriage.
  B. Either real property or personal property may be the subject of this type of ownership.
  C. Upon the death of a joint tenant, his interest in the property passes to his estate or heirs.
  D. All joint tenants must have equal interests in the property.
  C. Upon the death of a joint tenant, his interest in the property passes to his estate or heirs.

• Question 243:

  On January 1, 2004 a father gave his daughter a $50,000 straight (ordinary) life insurance policy on his life. Premiums are paid annually. The pertinent facts about the policy are: Date of issue: July 1, 1992

  -Premium paid on July 1, 2003 $800

  -

  Terminal reserve on July 1, 2003 5,000

  -

  Terminal reserve on July 1, 2004 6,000

  A. $5,800
  B. $50,000
  C. $5,900
  D. $5,400
  C. $5,900

• Question 244:

  On January 1, 2004 a father gave his daughter a $50,000 straight (ordinary) life insurance policy on his life. Premiums are paid annually. The pertinent facts about the policy are: Date of issue: July 1, 1992 Premium paid on July 1, 2003 $800 Terminal reserve on July 1, 2003 5,000 Terminal reserve on July 1, 2004 6,000 What is the value of the policy for federal gift tax purposes?

  A. $5,400
  B. $5,800
  C. $5,900
  D. $50,000
  C. $5,900

• Question 245:

  All the following statements concerning transfers at death under a will are correct EXCEPT:

  A. Specific bequests of a decedent's property are satisfied prior to distribution of the decedent's residuary estate.
  B. If during lifetime a decedent disposed of property that was the subject of a specific bequest, ademption occurs.
  C. It is common for a will to contain a clause that exempts the executor from posting bond.
  D. The most appropriate way to sever a joint tenancy with right of survivorship is for the joint tenant-decedent to make a specific bequest of the property under a will.
  D. The most appropriate way to sever a joint tenancy with right of survivorship is for the joint tenant-decedent to make a specific bequest of the property under a will.

• Question 246:

  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. $42,865
  C. $47,065
  D. $37,035
  D. $37,035

• Question 247:

  The personal representative of a decedent has the duty to file which of the following income tax returns?

  1.

  The decedent's final income tax return

  2.

  The estate's income tax return

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

• Question 248:

  Losses resulting from which of the following occurrences constitutes a permissible deduction from a decedent's gross estate to determine the adjusted gross estate?

  1.

  Unreimbursed losses of estate assets due to theft.

  2.

  Unreimbursed losses of estate assets due to a storm.

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

• Question 249:

  A wife owns a $100,000 life insurance policy on her husband's life. She has named her son the revocable beneficiary. Which of the following statements concerning the life insurance is (are) correct?

  1.

  At the husband's death, the interpolated terminal reserve of the policy is a gift to the son.

  2.

  The annual increase in the cash value is a gift to the son.

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

• Question 250:

  A man is planning to establish and fund a 20-year irrevocable trust for the benefit of his two sons, aged 19 and 22, and plans to give the trustee power to sprinkle trust income. From the standpoint of providing federal income, gift, and estate tax savings, which of the following would be the best choice of trustee?

  A. A bank or trust company
  B. The grantor's 70-year-old father
  C. The grantor of the trust
  D. The grantor's 22-year-old son
  A. A bank or trust company