American College HS-330 Online Practice Questions and Exam Preparation

American College HS-330 Online Questions & Answers

• Question 61:

  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. He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.
  C. His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.
  D. His refusal to accept the inheritance must be in writing.
  C. His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

• Question 62:

  Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?

  A. It is a form of property ownership that applies only to personal property.
  B. The property will be in the probate estate of the first joint tenant to die.
  C. It is a form of property ownership available only to married persons.
  D. One tenant can freely transfer his or her property interest to a third person.
  C. It is a form of property ownership available only to married persons.

• Question 63:

  Having a will enables an individual to do which of the following?

  1.

  Make testamentary bequests to selected charitable organizations

  2.

  Make specific bequests to selected friends

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

• Question 64:

  Which of the following provisions is (are) generally common to all buy-sell agreements?

  1.

  Provisions specifying how the purchase price is to be funded.

  2.

  Statement indicating the purpose of the agreement.

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

• Question 65:

  In addition to substantial probate assets, a married man with two minor children has a $1,000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her lifetime and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife. Which of the following courses of action would best accomplish these objectives?

  A. Assign the policy to his wife who will establish a revocable inter vivos trust to receive the death proceeds
  B. Assign the policy to an irrevocable inter vivos trust with five and five powers and designate the trustee to receive the death proceeds
  C. Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death
  D. Establish a revocable inter vivos trust and designate the trustee to receive death proceeds
  B. Assign the policy to an irrevocable inter vivos trust with five and five powers and designate the trustee to receive the death proceeds

• Question 66:

  Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?

  1.

  Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stirpes

  2.

  Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate

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

• Question 67:

  In addition to substantial probate assets, a married man with two minor children has a $1,000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her lifetime and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife. Which of the following courses of action would best accomplish these objectives?

  A. Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death
  B. Assign the policy to an irrevocable inter vivos trust with five and five powers and designate the trustee to receive the death proceeds
  C. Establish a revocable inter vivos trust and designate the trustee to receive death proceeds
  D. Assign the policy to his wife who will establish a revocable inter vivos trust to receive the death proceeds
  B. Assign the policy to an irrevocable inter vivos trust with five and five powers and designate the trustee to receive the death proceeds

• Question 68:

  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 to provide each grandchild with a substantial gift. Which of the following statements concerning the impact of the generation-skipping transfer tax (GSTT) on these transfers is correct?

  A. A direct gift of $1.5 million to each grandchild made during Alan's lifetime is exempt from GSTT.
  B. Any GSTT applicable to the gifts is imposed at a marginal rate based on Alan's wealth.
  C. Federal estate or gift tax will also be imposed on the gifts that are subject to the GSTT.
  D. Alan could avoid all GSTT by holding all his property until death and providing direct bequests for the grandchildren in his will.
  C. Federal estate or gift tax will also be imposed on the gifts that are subject to the GSTT.

• Question 69:

  The following are facts concerning a decedent's estate:

  -Taxable estate $1,800,000

  -Pre-1977 taxable gifts 100,000

  -

  Post-1976 adjusted taxable gifts 150,000

  -

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

  A. $2,150,000
  B. $1,650,000
  C. $1,800,000
  D. $1,950,000
  D. $1,950,000

• Question 70:

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

  1.

  The number of partners

  2.

  The divergence of the partners' business knowledge and skills

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