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Exam 25: Transfer Taxes and Wealth Planning

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Question 61

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The annual exclusion eliminates relatively small transfers of present interests in property.

A) True
B) False

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Question 62

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A present interest is the right to currently enjoy property or receive income payments from property.

A) True
B) False

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Question 63

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James and Jasmine live in a community property state. This year they transferred $800,000 of property to an irrevocable trust that provides their son, Aaron, a life estate and their daughter,Lauren, the remainder. At the time of the gift, the Table S value for Aaron was .18031. What is the amount, if any, of the taxable gifts?

This year Evelyn created an irrevocable trust to provide for Ed, her 32-year-old nephew, and Ed's family. Evelyn transferred $150,000 to the trust and named a bank as the trustee. The trust was directed to pay income to Ed until he reaches age 35 (three years from now), and at that time the trust is to be terminated and the corpus is to be distributed to Ed's two children (or their estates). Determine the amount, if any, of the taxable gift. The relevant interest rate is 6 percent.

The probate estate consists of all property owned by the decedent that is excluded from the gross estate.

At his death Tyrone's life insurance policy paid his estate $85,000. What amount, if any, is included in Tyrone's gross estate?

In order for a transfer to be treated as a completed gift the transfer must be irrevocably relinquished by the donor.

This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash. AtChristmas, Samantha gave each of her three nephews Christmas gifts of an additional$5,000 in cash. What is the amount of the taxable gifts, if any, made by Samantha this year?

Grace transferred $800,000 into trust with the income to be paid annually to her spouse, Isaiah, for life and the remainder to Taylor. Calculate the amount of the taxable gifts from the transfers.

The gross estate includes the value of half of real property owned by a decedent and spouse in joint tenancy with the right of survivorship.

Which of the following statements is(are) true for both gratuitous and testamentary transfers?

Which of the following is a completed taxable gift?

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years. After 20 years the trust corpus wouldrevert to Anthony. Which of the following is a true statement?

Natalie transferred $500,000 of bonds to a revocable trust with directions to the trustee to pay income to her aunt for five years after which the corpus is to be distributed to Natalie's niece. At year end, the trustee paid $15,000 of income to the aunt. Which of the following is a true statement?

At his death Stanley owned real estate worth $345,000 with two other individuals as equal tenants in common. Stanley contributed $50,000 to the $100,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.

At her death Tricia had an adjusted gross estate consisting of $8 million of property.Which of the following is a true statement about Tricia's estate or estate tax?

Adjusted taxable gifts are included when calculating the taxable estate but are not subject to double taxation because a tax credit is provided for taxes payable on adjusted taxable gifts.

The gross estate will not include the value of clothes and other personal items owned by the decedent at the time of death.

Which of the following is a true statement?