Economics homework help
Economics homework help.
- Gift taxes paid on post-1976 gifts are generally allowed as a credit against the tentative estate tax. True or False.
- The estate tax is not levied on tax-exempt municipal bonds. True or False.
- If the spouse of the transferor under the Uniform Transfers to Minors Act is the custodian, the property is includible in the spouse’s estate. True or False.
- Norma and John Baker’s jointly owned home (with right of survivorship) was fully paid for by John. Nevertheless, when Norma predeceased John, one-half the value of the home is includible in her estate. True or False.
- Testamentary charitable gifts are deductible up to 50 percent of the adjusted gross estate. True or False.
- The unified credit is the same for gift tax purposes as for estate tax purposes. True or False.
- General powers of appointment that are limited by ascertainable standards do not bring property into the Estate Tax Return. True or False.
- After selecting special use valuation, the farm value method is normally the preferred valuation technique. True or False.
- The following assets, which are not part of the probate estate, nevertheless are includible in the gross estate, except:
- Property transferred to a revocable trust by the decedent 17 years prior to death
- Property sold by the decedent two years prior to death for a private annuity of equal value
- Property transferred to decedent’s wife for life, then to their son if the son survives his mother, to the extent of the reversion
- A life insurance policy transferred two and a half years ago on the decedent’s life
- Which of the following retained powers is not an “incident of ownership” in a life insurance policy?
- A power to use the policy as collateral for loans not to exceed one-half its cash value.
- A power to select a settlement option spelled out in the policy.
- The power to cancel a group policy indirectly by resigning a position.
- A power to veto a change of beneficiary after the transfer of the policy to the current beneficiary.
- The following statements about “Qualified Terminable Interest Property” (QTIP) trusts are true, except:
- The QTIP trust is a “simple” trust and anyone, including a charity, may be the remainderman.
- A QTIP trust may not be implemented prior to the grantor’s death.
- Only the grantor’s spouse may be the income beneficiary, but may refuse to accept the bequest and elect against the will
- If a trust otherwise qualifies, QTIP treatment may be elected for an undivided portion of the trust, such as 78 percent
- John Marigold’s estate incurred the following payments during administration:
(1.) Charitable contributions of $15,000
(2.) Funeral expenses of $4,000
(3.) Mortgage payments of $5,000
(4.) Attorney’s fees of $10,000
Which of the above amounts offer the executor an option to deduct the payments?
- (1), (2), (3), and (4)
- (1) and (2)
- (1) and (3)
- (4)
- Which of the following is not deductible in arriving at the taxable estate?
- a) Administration expenses
- b) Casualty losses
- c) Adjusted taxable gifts after 1976
- d) All of the above.
- Which of the following statements is true under current law:
- a) All gifts made within three years of the decedent’s death are brought back into the estate and taxed.
- b) The “three-year” rule no longer applies to any lifetime gifts
- c) The “three-year” rule now applies mainly to gifts of life insurance.
- d) All of the above.
- By which of these forms of ownership does the share of a deceased owner pass automatically to the surviving owners without being subject to the decedent’s creditors:
- a) Community property
- b) Tenancy-in-common
- c) Joint tenancy
- d) All of the above
- The decedent’s final income tax return is due four months after the date of death. True or False.
- A decedent is allowed a full personal exemption on a final income tax return regardless of date of death. True or False.
- An estate is entitled to the standard deduction. True or False.
- In determining what is income to a trust, federal laws always take precedence over laws of the state in which the trust is created. True or False.
- A simple trust must distribute all of its taxable income each year. True or False.
- A trust agreement may provide explicit instructions on how trust property is to be managed, invested, and paid out. Thus, a grantor may control from the grave what he could have controlled while he was alive. True or False.
- When an estate or trust terminates all tax credits are lost. True or False.
- Estates and trusts operate under a three tier system of taxation for their beneficiaries. True or False.
- Business losses or capital losses incurred by a decedent prior to death:
- Can be carried over to an estate’s income tax return.
- Can be deducted by estate beneficiaries on their income tax returns
- End with the decedent’s final income tax return.
- Are not deductible on a decedent’s final income tax return.
- A trust created by a grantor during his own lifetime is called a:
- a) Grantor trust
- b) Inter vivos trust
- c) Testamentary trust
- d) Simple trust
- Income distributions from an estate to estate beneficiaries are recognized as income by beneficiaries on their tax returns for the year in which the:
- a) Distribution is received.
- b) Estate’s tax year ends
- c) Income distribution was earned by the estate.
- d) Income distribution was received by the estate.
- The income distribution system used to determine the taxation of estate income distributions to beneficiaries is a:
- a) One-tier system
- b) Two-tier system
- c) Three-tier system
- d) Four-tier system
- Which of the following items is not normally in accounting income (State Law Income) for a trust?
- a) Rental income
- b) Capital gains
- c) Dividends
- d) All of the above
- How much is an S-corporation taxed on?
- a) $6,000 c) $12,000 b) $8,000 d) $0
- When an estate or trust terminates, a number of tax attributes flow out to the beneficiaries. Which of the following does not go out to the beneficiaries?
- a) Passive losses
- b) Net operating losses
- c) Capital losses
- d) Excess deductions