American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 361:

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

• Question 362:

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

• Question 363:

  The failure of an individual to have a will can result in all the following EXCEPT:

  A. A surviving spouse receives only his or her elective share.
  B. The decedent's state of domicile might receive the property left by the decedent.
  C. Unnecessary death taxes may be imposed.
  D. Testamentary gifts to charity cannot be made.
  A. A surviving spouse receives only his or her elective share.

• Question 364:

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

  -

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

  -

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

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

• Question 365:

  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. It is possible for a charitable contribution made during the donor lifetime to generate both income and transfer tax deductions for the donor.
  C. 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.
  D. 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.
  D. 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 366:

  Which of the following statements concerning a grantor-retained annuity trust (GRAT) is correct?

  A. The transfer of property to the trust becomes a completed gift for gift tax purposes only at the termination of the grantor's retained interest term.
  B. The trust is used as a device for shifting income tax on the current trust income to the remainderperson(s).
  C. If the grantor dies before the retained interest term ends, the estate tax benefits are reduced.
  D. The grantor retains control of the trust property until revocation or death.
  C. If the grantor dies before the retained interest term ends, the estate tax benefits are reduced.

• Question 367:

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

• Question 368:

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

  1.

  Personal property is all property that is not considered to be real property.

  2.

  A mortgage on real property is treated as real property.

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

• Question 369:

  Alan, a widower, is a retired executive with substantial assets. He wishes to provide for the financial security of his two grandchildren since their father, Alan's son, has always managed money poorly. This year Alan would like each grandchild to receive a substantial gift. Which of the following statements concerning the generation-skipping transfer tax (GSTT) on these gifts is (are) correct?

  1.

  Federal estate or gift tax will not be imposed if the gift is otherwise subject to the GSTT.

  2.

  Assuming no prior gifts, Alan can gift a cumulative total of (not including the annual exclusion) $1.5 million to his grandchildren without the imposition of the GSTT.

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

• Question 370:

  A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year while still living in the house. The following are relevant facts:

  The father bought the property in 1980 for $130,000. The fair market value of the property when the gift was made in 1990 was $150,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father's death was $220,000. The daughter sold the property 3 months after her father's death for $220,000. She had a gain of?

  A. $140,000
  B. $220,000
  C. $120,000
  D