American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 41:

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

  1.

  The grantor is taxed on trust income during the retained term.

  2.

  The grantor makes an irrevocable transfer to the remainderperson(s) when the trust is created.

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

• Question 42:

  Which of the following statements concerning the gift or estate tax charitable deduction is (are) correct?

  1.

  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.

  2.

  A decedent-spouse estate may obtain both marital and charitable deductions for interests contributed to a charitable remainder trust when the surviving spouse is the only noncharitable income beneficiary for life.

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

• Question 43:

  Which of the following statements concerning the taxation of estates and trusts is correct?

  A. They are taxed on distributable net income that is retained.
  B. They are taxed as if they were partnerships.
  C. They are entitled to the standard deduction in determining tax.
  D. They are taxed as if they were corporations.
  A. They are taxed on distributable net income that is retained.

• Question 44:

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

• Question 45:

  Which of the following acts by a person other than a lawyer is clearly an unauthorized practice of law?

  A. A sister drafts a will for her brother using printed forms.
  B. A CLU explains to a client how a life insurance policy may solve estate liquidity needs.
  C. A CPA designs an estate plan for presentation to a client.
  D. A trust officer gives a client advice about the taxation of a trust.
  A. A sister drafts a will for her brother using printed forms.

• Question 46:

  Which of the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship is correct?

  A. This form of ownership is limited to real property.
  B. Nonqualified joint tenants may have unequal interests in the property.
  C. Upon the death of a joint tenant, the surviving joint tenant receives the decedent's interest by operation of law.
  D. Qualified joint tenancies cannot be severed without mutual consent.
  C. Upon the death of a joint tenant, the surviving joint tenant receives the decedent's interest by operation of law.

• Question 47:

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

  1.

  A guardian is appointed by a court.

  2.

  A guardian holds equitable title to the property he administers for his or her ward.

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

• Question 48:

  A wife with substantial property in her own name would like to provide for her husband in the event of her prior death but does not want him to be able to leave her property to a second wife if he remarries. She would also like to take advantage of the marital deduction to save federal estate taxes. Her attorney has advised her that qualified terminable interest property (QTIP) will accomplish her objectives. To qualify such property for the marital deduction, all the following requirements must be met EXCEPT:

  A. An irrevocable election must be made by the decedent's executor to have the property includible in the surviving spouse's gross estate.
  B. The surviving spouse must be given a general power to appoint each year at least $5,000 or 5 percent of the value of the property.
  C. The property must have been included in the decedent's gross estate for federal estate tax purposes.
  D. The surviving spouse must be given a lifetime right to receive all the property's income at least annually.
  B. The surviving spouse must be given a general power to appoint each year at least $5,000 or 5 percent of the value of the property.

• Question 49:

  Which of the following statements concerning the obligation of the personal representative of a decedent to file a federal estate tax return is (are) correct?

  1.

  A return must be filed by a decedent's estate if the gross estate plus adjusted taxable gifts equals the applicable exclusion amount or more, even though no federal estate tax is due.

  2.

  Unless extensions are granted, the return must be filed and the tax paid within 9 months of the decedent's death.

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

• Question 50:

  All the following statements concerning lifetime gifts are correct EXCEPT:

  A. A substantial amount of property may be given away over a period of time without the imposition of the federal gift tax because of the annual exclusion.
  B. The amount of gift tax paid within 3 years of death is included in the gross estate.
  C. If a wealthy widower lives more than 3 years after making a taxable gift to his sister, the value of the gift has no effect on his federal estate tax liability.
  D. Gifts of life insurance within 3 years of death are included in the donor-insured's gross estate.
  C. If a wealthy widower lives more than 3 years after making a taxable gift to his sister, the value of the gift has no effect on his federal estate tax liability.