American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 301:

  Which of the following transactions is a taxable gift for federal gift tax purposes?

  A. A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.
  B. A grandmother purchased a U.S. savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.
  C. A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.
  D. A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.
  A. A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.

• Question 302:

  Which of the following areas of consideration present common ethical issues for the estate planner?

  A. Consistency
  B. Compatibility
  C. Compensation
  D. Contracts
  C. Compensation

• Question 303:

  Harry, Barry, and Carrie incorporated their business, HBC and received 150 shares of stock each. They entered into a cross-purchase buy-sell agreement at this time. The agreement binds their estates to sell their shares of stock to the surviving shareholders. Each shareholder also agrees to purchase one-half of the shares held by the estate of the deceased shareholder. Assume Barry dies sometime later. Which of the following statements concerning this arrangement is (are) correct?

  1.

  When the agreement is carried out, HBC will have 300 shares of stock outstanding.

  2.

  Barry's estate will have additional liquidity to meet expenses and distribution requirements.

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

• Question 304:

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

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

• Question 305:

  Which of the following actions on the part of a trustee is a breach of his duties?

  A. Purchasing securities in good faith from a third party just prior to a sharp decrease in their value
  B. Investing all trust assets in securities that favor the income beneficiaries to the detriment of remainderpersons
  C. Placing cash from the sale of securities in a high yield money market fund pending a decision to invest the funds elsewhere
  D. Purchasing assets for personal use from the trust at their fair market value with the approval of all beneficiaries
  B. Investing all trust assets in securities that favor the income beneficiaries to the detriment of remainderpersons

• Question 306:

  Which of the following statements concerning both the joint tenancy with right of survivorship and the tenancy by the entirety forms of real property ownership is correct?

  A. Both forms of ownership are restricted to two equal owners at any one time.
  B. Both forms of ownership provide that an owner can sell his interest in the property at any time without destroying the form of ownership.
  C. Both forms of ownership provide that a deceased owner's interest passes to the surviving owner.
  D. Both forms of ownership are restricted to husband and wife.
  C. Both forms of ownership provide that a deceased owner's interest passes to the surviving owner.

• Question 307:

  A man established and funded an irrevocable trust and named a bank as trustee. All income from the trust is to be paid to his four grandchildren. Which of the following powers retained by the grantor of the trust will cause all or a portion of the trust assets to be includible in his gross estate for federal estate tax purposes?

  1.

  The power to add principal to the trust

  2.

  The power to vary the amounts of trust income paid to each grandchild

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

• Question 308:

  Which of the following statements concerning federal gift, estate, and income taxes is (are) correct?

  1.

  A taxable gift of income-producing property to a donee automatically transfers income tax liability on the gifted property to the donee.

  2.

  Once part or all of a taxable gift is made to a trust, the property can no longer be includible in the donor gross estate.

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

• Question 309:

  Which of the following statements concerning antenuptial agreements is (are) correct?

  1.

  They are frequently used prior to second marriages.

  2.

  They can affect a surviving spouse's right to receive an intestate share of a deceased spouse's estate.

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

• Question 310:

  All the following trust provisions avoid causing the inclusion of an irrevocable life insurance trust in an insured's gross estate EXCEPT

  A. a trust beneficiary's power to withdraw contributions to the trust
  B. a trustee's power to loan assets to the estate at the trustee's discretion
  C. a trustee's power to pay estate expenses
  D. a trustee's power to purchase assets from the estate at the trustee's discretion
  C. a trustee's power to pay estate expenses