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Exam 18: The Federal Gift and Estate Taxes

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Question 41

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In 2001,Katelyn inherited considerable property when her father died.When Katelyn dies in 2012,her estate may be able to use § 2013 (credit for tax on prior transfers)as to some of the estate taxes paid by her father's estate.

A) True
B) False

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Question 42

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Which,if any,of the following items is subject to indexation (adjusted to reflect inflation) ?

A) Monetary amount required to elect the alternate valuation date under § 2032.
B) Unified transfer tax credit.
C) Unified transfer tax rates.
D) Annual exclusion.
E) Choice b.and d.but not a.and c.

F) B) and E)
G) B) and D)

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Question 43

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Under certain circumstances,the gift-splitting election can be made even though the electing spouses are no longer married to each other.

At the time of her death,Rita held a promissory note from a loan she had made to her son.If Rita's will forgives the loan,the note is not included in her gross estate.

In which of the following situations is Polly's property ownership interest not lost by her prior death?

Which,if any,of the following is not a characteristic of the Federal estate tax?

The election of the alternate valuation date can affect the amount of a charitable deduction allowed to an estate for a bequest to a qualified charity.

Rachel owns an insurance policy on the life of Albert with Belle as the designated beneficiary.Upon Rachel's prior death,nothing regarding this policy is included in her gross estate.

Ray purchases U.S.savings bonds which he lists as "Ray and Donna" as co-owners.Donna is Ray's daughter.Donna predeceases Ray.No gift or estate tax consequences result from this situation.

A lifetime transfer that is supported by full and adequate consideration is not a gift.

In contrasting the computation of the Federal gift and estate taxes,are past taxable gifts handled in the same fashion? Explain.

The death of a joint tenant will defeat his or her interest in the property.

Harry and Brenda are husband and wife.Using his funds,Harry purchases real estate which he lists as: "Harry and Brenda,tenants by the entirety with right of survivorship." If Brenda dies first,half of the real estate will be included in her gross estate.

In the case of a transfer by gift,a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

In 1980,Mandy and Hal (mother and son) purchased land for $600,000 as joint tenants with right of survivorship.Of the $600,000 purchase price,Mandy provided $300,000 and Hal $300,000 (of which $200,000 had been received as a gift from Mandy) .In 2012,Hal dies first when the land is worth $3,000,000.As to the land,Hal's gross estate must include:

All of the charitable organizations that qualify for estate tax purposes also qualify for income tax purposes.

In determining whether a dividend issued on stock held by a decedent is included in the gross estate,the declaration date (rather than the record or payment dates)controls.

Daniel's will provides that all of his property passes to a trust,life estate to his wife,remainder to charity.If Daniel's executor does not make a QTIP election,the use of the alternate valuation date is possible.

Lily pays for her grandson's college tuition expenses.Under what conditions might such payments not be a gift?

Sandy pays a local college for her non-dependent boyfriend's tuition.The payment is subject to the Federal gift tax.