American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 51:

  The primary objective in estate planning is to

  A. preserve the marital deduction and applicable credit amount credit
  B. reflect accurately the client's wishes concerning the disposition of his or her wealth
  C. reduce estate taxes to the lowest amount possible
  D. prevent the intestate distribution of assets
  B. reflect accurately the client's wishes concerning the disposition of his or her wealth

• Question 52:

  Which of the following statements concerning pooled-income funds is (are) correct?

  1.

  The fund contains commingled donations from many sources.

  2.

  A decedent donation purchases units in the fund which generate income that is paid at least annually to a charity.

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

• Question 53:

  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 $140,000. The fair market value of the property when the gift was made in 1990 was $170,000. 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 $200,000. The daughter sold the property 3 months after her father's death for $200,000. She had a gain of

  A. $200,000
  B. $160,000
  C. $130,000
  D

• Question 54:

  Important factors in assessing liquidity needs in estate planning include which of the following?

  1.

  The types of assets that comprise the estate

  2.

  The date of drafting the will

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

• Question 55:

  A father is considering giving his daughter a gift. For tax planning purposes, the father should give his daughter which of the following?

  A. Raw land that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation
  B. Real estate that cost him $40,000 and is now worth $120,000, subject to a $110,000 mortgage
  C. Stock that cost him $10,000 and which now has a fair market value of $20,000
  D. A bond that cost him $15,000 and is now worth $10,000
  A. Raw land that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation

• Question 56:

  All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:

  A. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.
  B. A termination of a trust at the death of the nonskip life income beneficiary with the remainder distributed solely to skip persons.
  C. A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.
  D. A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild's parents are still alive.
  A. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.

• Question 57:

  All the following statements concerning a typical pour-over trust are correct EXCEPT:

  A. It is a device to consolidate all a decedent's assets to simplify administration.
  B. Properly drawn, it eliminates the need to file a federal estate tax return.
  C. The trust is created during the lifetime of the grantor.
  D. The trust is revocable during the lifetime of the grantor.
  B. Properly drawn, it eliminates the need to file a federal estate tax return.

• Question 58:

  All the following trust provisions avoid causing the inclusion of an irrevocable life insurance trust in an insured's gross estate EXCEPT

  A. a trustee's power to pay estate expenses
  B. a trust beneficiary's power to withdraw contributions to the trust
  C. a trustee's power to loan assets to the estate at the trustee's discretion
  D. a trustee's power to purchase assets from the estate at the trustee's discretion
  A. a trustee's power to pay estate expenses

• Question 59:

  Which of the following types of real property ownership will be deemed to be a tenancy in common?

  A. Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.
  B. Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.
  C. Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.
  D. Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.
  C. Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.

• Question 60:

  All the following statements concerning a complex trust are correct EXCEPT:

  A. The trustee may make distributions of principal to trust beneficiaries.
  B. Beneficiaries must receive all distributable net income in the year received by the trust.
  C. Beneficiaries are taxed on their share of distributable net income when received by them.
  D. A complex trust may make gifts to charity.
  B. Beneficiaries must receive all distributable net income in the year received by the trust.