Quiz On Account Statement: Trivia Exam!
(172).jpg "Quiz On Account Statement: Trivia Exam!")
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- 1.The alternate valuation date can be elected for estate tax purposes only if the election.
- A.
Increases the value of the gross estate
- B.
Decreases the value of the gross estate (B)
- C.
Decreases the estate tax liability (after reduction for tax credits). (C)
- D.
Both B and C are required
- 2.On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2002. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?
- A.
Six months
- B.
One year
- C.
Three years
- D.
No minimum time period exists
- 3.Four years ago Roper transferred to his son ownership of a $100,000 life insurance policy that Roper purchased on his own life in 2000. The cash value of the policy on the transfer date was $25,000. Roper died on March 1 of this year. The amount included in Roper's gross estate due to the life insurance policy is:
- A.
$0
- B.
$25,000
- C.
$35,000
- D.
$100,000
- 4.On March 1 Sue transfers stock worth $20,000 to Frank. How long must Sue live to avoid inclusion of the $20,000 of stock in her gross estate?
- A.
Six months
- B.
One year
- C.
Three years
- D.
No minimum time period exists, but she must be alive at transfer of ownership
- 5.The gross-up rule requires
- A.
All beneficial interests be included in the decedent's estate
- B.
Post-1976 gifts by the decedent be included in the decedent's estate
- C.
Certain gifts made by the decedent within three years of the date of death are included in the decedent's gross estate.
- D.
Gift taxes on gifts made by the decedent or the decedent's spouse that are paid by the decedent or his estate during the three-year period ending with the decedent's date of death must be included in the decedent's gross estate.
- 6.In February of the current year Tom dies. Two years and nine months before the date of death, Tom made a gift of stock valued at $2 million. Gift taxes paid on the transfer by Tom were $435,000 after reduction for a $345,800 unified credit ($780,800 - $345,800). At the time of his death the gifted stock was valued at $2.3 million. The amount included in Tom's gross estate from this transfer is
- A.
$2,000,000
- B.
$2,300,000
- C.
$435,000
- D.
None of the above
- 7.In 2003 Paul transfers $1,000,000 to a trust benefiting his three children. As trustee, he has the power to determine the amount of distributions each year. Paul dies in the current year when the trust has a value of $1,200,000. How much of the trust's value is included in Paul's estate?
- A.
$0
- B.
$400,000
- C.
$1,000,000
- D.
$1,200,000
- 8.Identify which of the following statements is true
- A.
The gross-up rule applies to the gift tax triggered by a gift during a three-year look-forward period
- B.
All gift taxes paid by the decedent on gifts made within five years of the date of death must be included in the gross estate
- C.
If a transferor retains voting rights in stock of a controlled corporation for the transferor's lifetime, the stock is included in the transferor's gross estate
- D.
All are false
- 9.Identify which of the following statements is true
- A.
If spouses are the only joint owners, only one-half of the value of the jointly owned property is included in the gross estate, regardless of the relative amount of consideration provided by either spouse
- B.
Special powers of appointment give the power holder less restricted powers than a general power of appointment
- C.
The gross estate does not include the value of life insurance policies on the decedent if the proceeds are receivable by the executor or for the benefit of the estate
- D.
All are false
- 10.Identify which of the following statements is true.
- A.
The tax base for the federal estate tax is the total of the decedent's taxable estate and post-1976 taxable gifts
- B.
Property included in a decedent's gross estate consists of only that property to which the decedent held title
- C.
Funeral expenses are not deductible from the gross estate
- D.
All are false
- 11.Martin transfers stock to an irrevocable trust and names himself to receive the trust income for life with the remainder interest gifted to his son. When Martin dies
- A.
None of the stock will be included in Martin's estate
- B.
The stock's value at the time of transfer to the trust will be included in Martin's estate
- C.
The value of the stock less the present value of the income receivable by Martin will be included in Martin's estate
- D.
The value of the stock at death will be included in Martin's estate
- 12.Which of the following is deductible in arriving at the amount of the taxable estate.
- A.
Expenses incurred in administering the estate
- B.
Casualty losses that occurred while administering the estate
- C.
Charitable contributions
- D.
All of the above
- 13.For 2009, the unified credit is equivalent to a statutory exemption of
- A.
$1,000,000.
- B.
$1,500,000.
- C.
$780,800.
- D.
$3,500,000
- 14.Identify which of the following statements is true.
- A.
The unified credit is the only credit common to both the gift and estate tax computation.
- B.
For estate tax purposes, publicly traded stocks are valued at their closing price on the date of death
- C.
Stocks traded on a stock exchange are valued at closing price for the date of death unless the alternate valuation date is elected
- D.
All are false
- 15.The FMV of an asset for gift or estate tax purposes is the same except for
- A.
Marketable securities
- B.
Land.
- C.
Life insurance policies
- D.
Patents.
- 16.Brent, who died on January 10, owned 10 shares of Potts Corporation stock. The closest trading dates to January 10 are January 8 (two working days before the date of death) and January 11 (one working day after the date of death). On January 8, the stock traded at a high of 101 and a low of 97 while on January 11 the high was 90 and the low was 86. The date-of-death per-share value is
- A.
$99.00.
- B.
$95.33
- C.
$93.50
- D.
$91.67
- 17.The value of the stock that is not publicly traded may be determined by considering:
- A.
The nature and history of the business
- B.
Earning capacity.
- C.
Dividend paying capacity.
- D.
All of the above
- 18.Appraisal methods used to value real estate for estate tax purposes may include:
- A.
Comparable sales
- B.
Reproduction cost
- C.
Capitalization of earnings
- D.
All of the above
- 19.Reversionary interests in publicly traded stocks included in a gross estate must be valued:
- A.
By an independent actuary
- B.
By an appraiser
- C.
By considering the fact that the transferor has died
- D.
Using actuarial tables
- 20.The alternate valuation date is generally:
- A.
3 months after the date of death
- B.
6 months after the date of death
- C.
9 months after the date of death
- D.
12 months after the date of death
- 21.Denise died April 1 and owned several bonds that paid interest March 31 and September 30. Also, she owned stock that paid dividends quarterly on March 31, June 30, September 30, and December 31. Denise's estate received the interest and dividends on the payment dates. What should be included in Denise's gross estate?
- A.
All interest and dividends received in year of death
- B.
Only interest and dividends received prior to the date of death
- C.
Only interest and dividends received after the date of death
- D.
None of the interest and dividends received
- 22.Identify which of the following statements is false
- A.
The "blockage" regulations allow the IRS to prevent the estate's executor from electing the alternate valuation date
- B.
If the alternate valuation date is elected, changes in value that occur solely because of a "mere lapse of time" usually are to be ignored
- C.
The alternate valuation date can be elected for estate tax purposes only if the election decreases the value of the gross estate and estate tax liability (after reduction for credits).
- D.
If property is sold within 6 months of the date of death, the alternative valuation date is the date of sale.
- 23.Identify which of the following statements is true.
- A.
The alternate valuation date can be used for estate tax purposes only if the election increases the value of the gross estate
- B.
If the alternative valuation date is elected, changes in value that occur solely because of "mere lapse of time" must be ignored
- C.
Gross estate, a federal law concept, is generally smaller than the probate estate, a state law concept
- D.
All are false
- 24.Identify which of the following statements is true.
- A.
A curtesy interest is a widower's interest in his deceased wife's property
- B.
All gifts made within three years of the date of death must be included in the gross estate
- C.
Dower rights are not the same as curtesy rights
- D.
All are false
- 25.Identify which of the following statements is true
- A.
Reversionary interests of less than 5% are includible in the gross estate
- B.
A reversionary interest means a chance exists that the property may pass back to the transferor under the terms of the transfer
- C.
If a reversionary interest exceeds 3% of the property's value, the amount that is included in the estate is not the value of the reversionary interest, but rather the date-of-death value of the gifted property less the value of intervening life estates
- D.
All are false
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