American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 331:

  A man recently died with only probate assets. Under the terms of his will, he left his entire probate estate outright to his wife. The following are relevant facts about the estate:

  -Gross estate $1,700,000

  -Estate administration expenses 30,000

  -Debts of decedent 65,000

  -

  Allowable funeral expenses 5,000

  A. $1,635,000
  B. $1,695,000
  C. $1,665,000
  D. $1,600,000
  D. $1,600,000

• Question 332:

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

  A. Instead of parents paying an outside executive $60,000, a son runs their business for 8 months without charging a fee.
  B. The parents of a married son permit their son and his family to use a summer cottage that rents for $3,000 per month on a rent-free basis.
  C. A father cancels a $50,000 note his daughter gave him when he made a loan to her 2 years ago.
  D. A father gives his 19-year-old daughter a note promising to give her his Rolls Royce when she reaches the age of 21.
  C. A father cancels a $50,000 note his daughter gave him when he made a loan to her 2 years ago.

• Question 333:

  Which of the following statements concerning state death tax exemptions and tax rates for classes of estate beneficiaries is (are) correct?

  1.

  Exemptions are determined by the closeness of the beneficiary's blood relationship to the decedent.

  2.

  Closest relatives receive the lowest tax rates and lowest exemption amounts.

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

• Question 334:

  A wife makes outright gifts of $66,000 this year to her son, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?

  A. Wife $12,000, husband $32,000
  B. Wife $32,000, husband $32,000
  C. Wife $22,000, husband $22,000
  D. Wife $44,000, husband 0
  C. Wife $22,000, husband $22,000

• Question 335:

  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 Y
  E. State Z
  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 336:

  A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets. Which of the following courses of action will best accomplish these objectives?

  A. Make her a gift of enough corporate bonds from his portfolio so that she will be able to support herself from the interest payments
  B. Make her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself
  C. Purchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her
  D. Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds
  B. Make her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself

• Question 337:

  The following are facts concerning a decedent's estate:

  -Taxable estate $2,000,000

  -Pre-1977 taxable gifts 500,000

  -

  Post-1976 adjusted taxable gifts 300,000

  -

  Post-1976 gifts made to a qualified charity 200,000

  A. $2,300,000
  B. $ 400,000
  C. $2,500,000
  D. $2,000,000
  A. $2,300,000

• Question 338:

  Which of the following factors is (are) used to make a choice between having an entity-purchase or cross-purchase partnership buy-sell agreement?

  1.

  The cost basis of the partners' business interests.

  2.

  The amount of the partners?individual personal net worths.

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

• Question 339:

  All the following items will be included in a decedent's gross estate at their date of death value for federal estate tax purposes EXCEPT

  A. a no-refund life annuity payable to the decedent that was purchased by the decedent from a life insurance company
  B. a gratuitous lifetime transfer of property in which the decedent retained the power to revoke the transfer with the consent of another person
  C. a gratuitous transfer of property taking effect at the decedent's death
  D. a gratuitous lifetime transfer in which the decedent retained a reversionary interest on the date of death equivalent to more than 5 percent of the value of the property
  A. a no-refund life annuity payable to the decedent that was purchased by the decedent from a life insurance company

• Question 340:

  All the following are steps in calculating a decedent's maximum estate tax marital deduction EXCEPT:

  A. Subtract the allowable expenses and debts to determine the adjusted gross estate.
  B. Subtract the applicable exclusion amount available in the year of the decedent's death.
  C. Compute the decedent's gross estate.
  D. Determine the net amount of property in the gross estate that passes to the surviving spouse in a manner qualifying for the marital deduction.
  B. Subtract the applicable exclusion amount available in the year of the decedent's death.