American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 321:

  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interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stirpes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. 1 only
  D. Neither 1 nor 2
  A. Both 1 and 2

• Question 322:

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

• Question 323:

  All the following factors are important in assessing liquidity needs in estate planning EXCEPT the

  A. ages of the residuary estate beneficiaries
  B. types of assets that comprise the estate
  C. marital status of the testator
  D. projected estate tax liability
  A. ages of the residuary estate beneficiaries

• Question 324:

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

  A. the value of property subject to a general power of appointment that the decedent possessed at death
  B. the value of a gratuitous lifetime transfer in which the decedent retained a reversionary interest on the date of death worth more than 5 percent of the value of the property and which the donee must survive the decedent to possess
  C. the value of all gratuitous lifetime transfers of property made within 3 years of death
  D. the value of a gratuitous lifetime transfer in which the decedent retained the right for life to receive the income from the property
  C. the value of all gratuitous lifetime transfers of property made within 3 years of death

• Question 325:

  A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $900,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm

  the land if it can be included in his father's estate at its current use value. Additional facts are:

  1.Average annual gross rentals from nearby farms of similar acreage are $36,000.

  2.Average annual state and local real estate taxes on the farm are $4,000.

  3.The interest rate for loans from the Federal Land Bank is 8 percent.

  For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

  A. $400,000
  B. $500,000
  C. $600,000
  D. $300,000
  A. $400,000

• Question 326:

  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. 1 only
  C. Neither 1 nor 2
  D. 2 only
  D. 2 only

• Question 327:

  All the following powers held by the grantor of an irrevocable trust will cause the trust assets to be brought back into the estate of the grantor EXCEPT the power to

  A. designate who shall enjoy the trust income
  B. add principal to the trust
  C. change the trust remainderpersons
  D. terminate the trust
  B. add principal to the trust

• Question 328:

  The federal gift tax is

  A. a tax on the right of the donee to receive the property
  B. levied directly on the gift
  C. a flat tax based on gifts made in any taxable year
  D. a tax on the right of the donor to make the gift
  D. a tax on the right of the donor to make the gift

• Question 329:

  Which of the following statements concerning charitable guaranteed annuity interests is (are) correct?

  1.

  To qualify for an estate tax charitable deduction, guaranteed annuity interests must be made in trust.

  2.

  These interests refer to the charity right to receive a determinable income amount at least annually for a specific term or life (lives) or one or more noncharitable beneficiaries.

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

• Question 330:

  For estate tax purposes which of the following is (are) a form of charitable gifts that may qualify for the charitable deduction?

  1.

  Partial interests

  2.

  Guaranteed annuity interests

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