American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 291:

  Which of the following statements concerning estates and trusts is (are) correct?

  1.

  Both estates and trusts come into being by operation of law.

  2.

  The personal representative of an estate and the trustee have similar fiduciary responsibilities.

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

• Question 292:

  Among the assets in a decedent's gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. The relevant facts about this estate are:

  -Adjusted gross estate $1,200,000

  -Fair market value of stock in the

  -closely held corporation 500,000

  -Administration and funeral expenses 25,000

  -State inheritance taxes 40,000

  -

  Federal estate taxes 160,000

  A. $225,000
  B. $500,000
  D. $ 65,000
  A. $225,000

• Question 293:

  All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT

  A. a gratuitous transfer of real property to a revocable inter vivos trust
  B. an outright, gratuitous transfer of real property in contemplation of death
  C. the gift taxes paid last year on a gratuitous transfer of real property
  D. a gratuitous transfer of real property with a reserved right to use and enjoy it for life
  B. an outright, gratuitous transfer of real property in contemplation of death

• Question 294:

  All the following are characteristics of a buy-sell agreement EXCEPT

  A. It provides for the continuation of the business
  B. It provides liquidity for estate settlement needs
  C. It provides a market for the business
  D. It provides for easier probating of the business
  D. It provides for easier probating of the business

• Question 295:

  John plans to transfer his life insurance policy to an irrevocable trust for the benefit of his 19-year- old daughter, Jane. Which of the following conditions will enable the gift to qualify for the annual exclusion?

  1.

  Jane is the irrevocable beneficiary of the life insurance trust but cannot withdraw from the trust until the death benefits are paid.

  2.

  Jane is given "Crummey" demand powers permitting the withdrawal at her discretion of the annual additions to the trust.

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

• Question 296:

  All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:

  A. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.
  B. A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.
  C. A termination of a trust at the death of the nonskip life income beneficiary with the remainder distributed solely to skip persons.
  D. A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild's parents are still alive.
  A. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.

• Question 297:

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

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

• Question 298:

  Which of the following statements concerning pooled-income funds is (are) correct?

  -

  A pooled income fund is similar to a mutual fund maintained by a qualified charity.

  -

  It is an irrevocable arrangement in which the remainder interest passes to charity.

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

• Question 299:

  Which of the following items of property will be included in a decedent's gross estate for federal estate tax purposes?

  1.

  The value of property subject to a general power of appointment that the decedent possessed at death

  2.

  The value of all gratuitous lifetime transfers of property made within 3 years of death

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

• Question 300:

  All the following statements concerning an entity-purchase buy-sell agreement for a partnership are correct EXCEPT:

  A. The partnership, in effect, liquidates the interest held by the decedent-partner's estate.
  B. The partnership makes payments to the decedent-partner's estate to liquidate the partnership interest held by the estate.
  C. It is the surviving partners who purchase the decedent's business interest so that the partnership can afford to pay the decedent's estate.
  D. Both the partners and the partnership are parties to the agreement that provides for business continuation.
  C. It is the surviving partners who purchase the decedent's business interest so that the partnership can afford to pay the decedent's estate.