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1. A man died in February of this year. Last year, when he learned that he had a terminal illness, he immediately made the following gifts and filed the required gift tax return: Fair Market Value Gift of listed stock to a
*qualified charity $100,000
*Gift of listed bonds to his wife 200,000
*Gift of a boat to his son 10,000
*Gift of a sports car to his daughter 10,000
What amount must be brought back to the man's estate as an adjusted taxable gift in the calculation of his federal estate taxes?
A) 0
B) $320,000
C) $280,000
D) $ 90,000
2. All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:
A) A termination of a trust at the death of thenonskip life income beneficiary with the remainder distributed solely to skip persons.
B) A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.
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.
3. Which of the following actions on the part of a trustee is (are) a breach of his duties?
1.Placing substantial amounts of cash from the sale of securities in a noninterest bearing checking account for a period of years
2.Investing all trust assets in securities that favor income beneficiaries to the detriment of remainderpersons
A) Both 1 and 2
B) 1 only
C) 2 only
D) Neither 1 nor 2
4. The personal representative of a decedent has the duty to file all the following tax returns EXCEPT
A) the decedent's final income tax return
B) the federal estate tax return
C) the estate's income tax return
D) the surviving spouse's income tax return for the year of death
5. A wife owns a $100,000 life insurance policy on her husband's life. She has named her son the revocable beneficiary. Which of the following statements concerning the life insurance is (are) correct?
1.At the husband's death, the interpolated terminal reserve of the policy is a gift to the son.
2.The annual increase in the cash value is a gift to the son.
A) Both 1 and 2
B) 1 only
C) 2 only
D) Neither 1 nor 2
Solutions:
Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: A | Question # 4 Answer: D | Question # 5 Answer: D |
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