American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 311:

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

• Question 312:

  Believing that his death was imminent, a widower gave his son some real estate two years ago, and filed a timely gift tax return. The widower died on January 1st of this year. Additional facts are: Widower's basis in the real estate $200,000 Value of real estate when gifted 510,000 Value of real estate on date of death 1,000,000 Amount of gift tax paid by widower 159,500 Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:

  A. The widower recognized no capital gain for income tax purposes at the time the gift was made.
  B. The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.
  C. The son's income tax basis in the real estate is $1,000,000.
  D. The gift tax paid is brought back into the widower's gross estate at $159,500.
  C. The son's income tax basis in the real estate is $1,000,000.

• Question 313:

  Which of the following types of partial interests in property may be allowed a charitable deduction for estate tax purposes?

  1.

  A remainder interest in the donor vacation home

  2.

  A testamentary gift of a percentage of a decedent entire interest in property held in trust

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

• Question 314:

  The executor of an estate has a choice of waiving the executor's fee. Factors that should be considered by the executor in making this choice include all the following EXCEPT

  A. the estate tax bracket of the estate
  B. the income tax brackets of the other beneficiaries
  C. whether the executor is otherwise a beneficiary of the estate
  D. the income tax bracket of the executor
  B. the income tax brackets of the other beneficiaries

• Question 315:

  A widower dies leaving a net probate estate of $300,000. At the time of his death, his descendants are as follows:

  A son, Joe, who has no children;

  A deceased daughter, Mary, whose two children, Irene and Sally, survive; and

  A daughter, Anne, who has one child, Harry

  Assuming that the widower's will provides for the distribution of his assets in equal shares to his children, per stirpes, which of the following correctly states the amounts each descendant will receive?

  A. $60,000 to Joe, $60,000 to Irene, $60,000 to Sally, $60,000 to Anne, and $60,000 to Harry
  B. $75,000 to Joe, $75,000 to Irene, $75,000 to Sally, and $75,000 to Anne
  C. $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, and $100,000 to Anne
  D. $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, $50,000 to Anne, and $50,000 to Harry
  C. $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, and $100,000 to Anne

• Question 316:

  Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?

  1.

  Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stirpes

  2.

  Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate

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

• Question 317:

  A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1,500,000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. Which of the following statements concerning this action is (are) correct?

  1.

  If the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.

  2.

  If the husband dies first, the probate costs of his estate could be increased.

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

• Question 318:

  Mr. Allen died early this year survived by his spouse Mrs. Allen. Among the items of family property are:

  1.A $200,000 life insurance policy on Mr. Allen's life with Mrs. Allen designated as beneficiary. Mrs. Allen has been the owner of the policy ever since it was issued 4 years ago.

  2.The family residence with a fair market value of $300,000. Mr. and Mrs. Allen own the residence jointly with the right of survivorship even though Mr. Allen purchased it with his separate funds.

  3.A

  $20,000 bank account. Mr. and Mrs. Allen own the account jointly with the right of survivorship even though Mrs. Allen made all the deposits.

  What amount of the family property will be included in Mr. Allen's gross estate for federal estate tax purposes?

  A. $350,000
  B. $300,000
  C. $360,000
  D. $160,000
  D. $160,000

• Question 319:

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

  A. A grantor receives an annual payout from a GRUT that is based on the value that the trust grows or contracts to each year.
  B. After the initial transfer to a GRAT, the grantor is prohibited from making additional contributions to the trust.
  C. For gift tax purposes a grantor's retained interest in these trusts is valued at zero.
  D. Post-transfer appreciation of property transferred to these trusts is excluded from the grantor's gross estate.
  C. For gift tax purposes a grantor's retained interest in these trusts is valued at zero.

• Question 320:

  Which of the following statements concerning the methods of valuing a closely held business for federal estate tax purposes is (are) correct?

  1.

  The capitalization-of-adjusted-earnings method uses a capitalization rate that varies inversely with the degree of risk and rate of return.

  2.

  The adjusted-book value method involves adjusting the asset components of a business to an approximate fair market value for each component.

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