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Exam 27: The Federal Gift and Estate Taxes

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Question 51

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Walt dies intestate (i.e.,without a will)in the current year with a gross estate valued at $4,000,000.Under applicable state law,Walt's property passes to Kelly or to Belle,in that order.Kelly has an estimated net worth of $3,000,000 while Belle has none.From a tax planning standpoint,what course of action might be advisable.

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This might be a good situation to make u...

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Question 52

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At the time of her death on June 4,2011,Mary owned the following assets. As to these transactions,how much is included in Mary's gross estate?

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$1,622,000.$800,000 (FMV of Ta...

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Question 53

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At the time of her death in 2011,Amber owns property worth $4,000,000.Other information regarding her affairs is as follows. All of these items (except the casualty loss)were paid by her estate and none were deducted on Form 1041 (income tax return of the estate).What is Amber's taxable estate?

For Federal estate tax purposes,the gross estate does not include property that will pass to a surviving spouse.

At the time of his death,Hal owned 10 cemetery lots worth $40,000 ($4,000 each)for use by himself and his family.These lots are included in Hal's gross estate and a deduction of $4,000 is allowed the estate.

In which,if any,of the following independent situations has Jean made a gift?

Andrea dies on April 30,2011.Which,if any,of the following items is included in her gross estate?

Which,if any,of the following statements correctly reflects the rules applicable to the alternate valuation date ?

Reba purchases U.S.savings bonds which she lists in the name of Rod,Reba's son.The purchase of the bonds does not constitute a gift.

In the past,the amount of the unified tax credit has been the same for both transfers by gift and transfers by death.

Kim,a resident and citizen of Korea,dies during an operation at the Mayo Clinic in Rochester (MN).Because Kim died in the U.S.,he will be subject to the Federal estate tax.

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

At one point,the tax rates applicable to transfers by gift were lower than those applying to transfers by death.

For gift tax purposes,a property settlement in consideration of marriage (i.e.,prenuptial agreement)is not treated the same as a property settlement incident to a divorce.

Under the alternate valuation date election,each asset in the gross estate is valued at the lesser of the date of death value or six months thereafter.

For Federal estate tax purposes,the gross estate may include property the decedent does not own.

Using his separate funds,Wilbur purchases an annuity which pays him a specified amount until death.Upon Wilbur's prior death,a reduced amount is to be paid to Marcia for her life.Marcia predeceases Wilbur.Nothing concerning the annuity contract is included in Marcia's gross estate.

The election of the alternate valuation date cannot affect the amount of a charitable deduction allowed to an estate for a bequest to a qualified charity.

In community property states,all property acquired after marriage by either spouse is community property.

In his will,Hernando provides for $50,000 to go to the Madrid,Spain,school system.Even though it is a foreign charity,the bequest will qualify as a charitable deduction for estate tax purposes.