American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 341:

  Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?

  1.

  Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.

  2.

  Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.

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

• Question 342:

  A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required EXCEPT:

  A. His refusal to accept the inheritance must be received by the executor of his father's estate within 9 months of his father's death.
  B. His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.
  C. His refusal to accept the inheritance must be in writing.
  D. He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.
  B. His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

• Question 343:

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

• Question 344:

  Which of the following statements concerning the so-called "kiddie-tax" on unearned income of children under age 14 is (are) correct?

  1.

  The rules apply to earned income of the children.

  2.

  The rules apply to trust income received by a child under age 14 only if the trust was established by the child's parents.

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

• Question 345:

  All the following statements concerning property ownership by a married couple residing in a community-property state are correct EXCEPT:

  A. All property that is not separate property is community property.
  B. Property inherited during the marriage is the separate property of the spouse who inherited it.
  C. Community property loses its identity when a community-property couple moves to a common- law state.
  D. Income earned by one spouse becomes community property.
  C. Community property loses its identity when a community-property couple moves to a common- law state.

• Question 346:

  Which of the following statements concerning certain types of property interests is (are) correct?

  1.

  The person or entity who has title to the property is the legal owner of the property.

  2.

  The person who has the right to all income earned on the property is the beneficial or equitable owner of the property.

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

• Question 347:

  Ignoring the annual per-donee exclusion, which of the following transfers is a gift for federal gift tax purposes?

  A. A creditor cancels the promissory note of a recently unemployed friend as a charitable gesture.
  B. A father promises to buy his daughter a condominium when she finishes college.
  C. A grandmother pays her grandson's $30,000 tuition at an Ivy League university.
  D. An individual gratuitously performs valuable services for the benefit of a close friend.
  A. A creditor cancels the promissory note of a recently unemployed friend as a charitable gesture.

• Question 348:

  All the following statements concerning the gift and estate tax chartiable deduction are correct EXCEPT:

  A. An estate tax charitable deduction is allowed for the full value of property transferred to a qualified charity but only if the property is included in the donor gross estate.
  B. A donor is denied a charitable deduction for property that passes to a qualified charity as the result of a qualified disclaimer if the donor original transfer was to a noncharitable donee.
  C. It is possible for a charitable contribution made during the donor lifetime to generate both income and transfer tax deductions for the donor.
  D. If the donor retains an interest in property contributed to a qualified charity during lifetime, the value of the property may be included in the donor gross estate.
  B. A donor is denied a charitable deduction for property that passes to a qualified charity as the result of a qualified disclaimer if the donor original transfer was to a noncharitable donee.

• Question 349:

  An executor elects to value the assets of the estate at the alternative valuation date 6 months after death. Which of the following statements concerning the estate tax value of assets included in this estate is correct?

  A. Property distributed under the will before the alternate valuation date is valued at the date of death.
  B. Property that has increased in value since the date of death may be valued at the date of death if the executor so elects.
  C. An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.
  D. Property sold before the alternate valuation date is valued at the alternate valuation date.
  C. An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.

• Question 350:

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