American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 281:

  All the following statements concerning a grantor-retained unitrust (GRUT) are correct EXCEPT:

  A. When the grantor dies during the retained interest term, the estate tax benefits are increased.
  B. When the trust is created, the grantor makes an irrevocable transfer to remainderperson(s).
  C. The transfer of the remainder interest in the trust is a current gift for gift tax purposes.
  D. The grantor's applicable credit amount may be applied to the gifted remainder interest in the trust.
  A. When the grantor dies during the retained interest term, the estate tax benefits are increased.

• Question 282:

  A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year while still living in the house. The following are relevant facts: The father bought the property in 1980 for $130,000. The fair market value of the property when the gift was made in 1990 was $150,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father's death was $220,000. The daughter sold the property 3 months after her father's death for $220,000. She had a gain of

  A. $120,000
  C. $140,000
  D. $220,000
  B

• Question 283:

  To determine whether a taxable gift has been made, the IRS focuses on all the following factors EXCEPT:

  A. Was the value of the gift property in excess of the annual per-donee exclusion?
  B. Was the property transferred for less than an adequate and full consideration in money or money's worth?
  C. Was the transferred property real property or personal property?
  D. Did the donor absolutely, irrevocably, and currently divest himself of dominion and control over the property?
  C. Was the transferred property real property or personal property?

• Question 284:

  Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?

  1.

  Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.

  2.

  Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.

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

• Question 285:

  The Decedent, T, died this year. The facts concerning T estate are:

  -Gross estate $2,700,000

  -Marital deduction 900,000

  -Charitable deduction 110,000

  -Gifts made after 1976 130,000

  -

  State death taxes payable 165,000

  A. $1,395,000
  B. $1,525,000
  C. $1,655,000
  D. $1,285,000
  B. $1,525,000

• Question 286:

  Generally the courts will accept as the federal estate tax value of a closely held corporate business the price established by a buy-sell agreement if all the following conditions are met EXCEPT:

  A. The agreement requires a deceased shareholder's executor to sell the stock at the price specified in the agreement.
  B. The agreement as to per-share value is fair, adequate, and made at arm's length.
  C. The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.
  D. The agreement requires a shareholder to first offer his stock to the corporation or other shareholders at the specified price if he wishes to sell it during his lifetime.
  C. The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.

• Question 287:

  A father wants to accumulate funds for his 12-year-old son's college education. On the advice of his attorney, the father establishes an IRC Section 2503(c) trust and funds it with annual gifts. All the following statements concerning this arrangement are correct EXCEPT:

  A. In the event of the son's death prior to age 21, trust assets must either be payable to the son's estate or be subject to a general power of appointment held by the son.
  B. The father's annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.
  C. The trust must be irrevocable.
  D. Any accumulated income and all trust principal must be available for distribution to the son when he attains age 21.
  B. The father's annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.

• Question 288:

  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 X
  C. State W
  D. State Z
  E. State Y
  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?

• Question 289:

  A mother died leaving her property equally to her wealthy daughter and her poor son. The daughter wishes to disclaim her share of the inheritance so that it will pass to her brother without her incurring any gift tax liability. Assume that the disclaimer is written, is timely, and is irrevocable. Which of the following statements concerning an additional requirement of a qualified disclaimer is (are) correct?

  1.

  The daughter refusal must direct specifically that her brother is to receive her inheritance.

  2.

  The daughter must not have received any part of her inheritance or any income from it prior to her refusal to accept it.

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

• Question 290:

  The failure of an individual to have a will can result in all the following EXCEPT:

  A. A surviving spouse receives only his or her elective share.
  B. Unnecessary death taxes may be imposed.
  C. Testamentary gifts to charity cannot be made.
  D. The decedent's state of domicile might receive the property left by the decedent.
  A. A surviving spouse receives only his or her elective share.