Question;1. Windmill Corporation, a Dutch corporation, is owned by the following unrelated persons: 50 percent by a U.S. corporation, 5 percent by a U.S. individual, and 45 percent by a Swiss corporation. During the year, Windmill earned $2,000,000 of subpart F income. Which of the following statements is true about the application of subpart F to the income earned by Windmill?Windmill is a CFC and the U.S. corporation and U.S. individual will have a deemed dividend of $1,000,000 and $100,000, respectively.Windmill is a CFC and only the U.S. corporation will have a deemed dividend of $1,000,000.Windmill is a CFC and the U.S. corporation, U.S. individual, and Swiss corporation will have a deemed dividend of $1,500,000, $100,000, and $900,000, respectively.Windmill is not a CFC and none of the shareholders will have a deemed dividend under subpart F.2. Before subpart F applies, a foreign corporation must be a CFC for how many consecutive days?1301833653. The amount of the estate tax is directly related to the amount of taxable gifts.TrueFalse4. An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.TrueFalse5. The estate tax is imposed on testamentary transfers.TrueFalse6. The gross estate always includes the value of half of any real property owned by a decedent and another person in joint tenancy with the right of survivorship.TrueFalse;7. A completed gift must be irrevocably relinquished by the donor.TrueFalse8. Both spouses must consent to any gift-splitting election.TrueFalse9. A serial gift strategy consists of arranging a trust to maximize the value of the unified credit.TrueFalse10. A bypass provision in a will requires a decedent to have a taxable estate in order to use a unified credit to reduce total estate taxes on a married couple.TrueFalse11. A gratuitous transfer of property made during the lifetime of the donor is called:an incomplete gift.a testamentary transfer.a taxable gift.an intervivos transfer.All of these.12. Which of the following statements are true for both gratuitous and testamentary transfers?A unified credit of up to $1 million reduces the tax on any transfer.An annual exclusion offsets any transfer up to $13,000.An election can be made to split a transfer between spouses.A charitable and a marital deduction are allowed in computing the taxable transfer.All of these are true.13. At her death Tricia had an adjusted gross estate consisting of $8 million of property. Which of the following is a true statement about Tricia's estate or estate tax?Tricia must have a taxable estate over $8 million.Tricia's taxable estate will not exceed $8 million.Tricia must have a probate estate tax of zero.Tricia must have a gross estate tax of zero.None of these is necessarily true.14. Which of the following is a true statement about the Federal gift tax return (Form 709)?Form 709 is due by the 15th day of the ninth month following the date of the gift.Form 709 must be filed if a taxpayer wishes to elect gift splitting.Form 709 need not be filed unless a taxpayer's taxable gifts exceed the exemption equivalent.Form 709 is due nine months after the death of the decedent.None of these is true.15. As customary, Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $67,000. What is the amount of the taxable gift?zero - the marital deduction offsets the gift as long as Jayden and Olivia are married by year end.$54,000.$67,000.zero - this transfer is not gratuitous.None of these.16. Alexis transferred $400,000 to a trust with directions to pay income to her husband, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?$387,000.$59,000.$328,000.$325,000.None of these.17. Which of the following is a true statement?A serial gift strategy utilizes intervivos gifts to multiple donees over multiple years to maximize the annual exclusion.A serial gift strategy works well even if the gifts don't qualify as present interests.A bypass trust avoids all estate taxes on the estate of the first spouse to die.The income tax savings from holding appreciated property until death is always outweighed by the additional estate tax imposed on the property.None of these is true.
Paper#44518 | Written in 18-Jul-2015Price : $22