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Law question data bank




Question;2282. Question TF #1;One of the objectives of family tax planning is to minimize income taxes on;transfers of property within the family unit.;a.;True;b. False;2283. Question TF #2;In arriving at the valuation of assets for estate tax purposes, the location of;the property must be considered.;a.;True;b. False;2284. Question TF #3;At the time of his death, Rex owned an RV. For valuation purposes, the RV;should be included in his gross estate at the price a dealer in RVs would pay;for the property.;a.;True;b. False;2285. Question TF #4;If a decedent?s household goods are sold through public auction, the price;received should be the valuation used for Federal estate tax purposes.;a.;True;b. False;2286. Question TF #5;Doug inherited his mother?s bedroom furniture worth $3,000. For sentimental;reasons, Martha, the daughter, pays Doug $3,500 for the furniture. The;furniture should be included in the mother?s gross estate at $3,500.;a.;True;b. False;2287. Question TF #6;At the time of his death, Fred held some notes receivable for loans he made to;his two daughters and the payment of which he forgives in his will. The amount;to be included in Fred?s gross estate as to these notes is affected by his;forgiveness.;a.;True;b. False;2288. Question TF #7;Commercial annuity contracts should not be valued using the tables issued by;the IRS.;a.;True;b. False;2289. Question TF #8;In valuing a life insurance policy that has not matured (i.e., the insured is;still alive), it makes no difference whether the policy is paid up.;a.;True;b. False;2290. Question TF #9;Edgar creates a trust, life estate to Connie (age 46), remainder to Gene (age;18). In determining the value of the life estate, use the multiple given in the;IRS valuation table for a person age 18.;a.;True;b. False;2291. Question TF #10;Al creates a trust, income payable to John (age 18) for 8 years, remainder to;Carol (age 36). In determining the value of John?s interest, use the multiple;provided in the tables for an 8-year term certain income interest.;a.;True;b. False;2292. Question TF #11;A farm has a best use valuation of $2.9 million and a current use valuation of;$2 million. If ? 2032A is elected, the farm can be valued in the deceased;owner?s gross estate at $2 million.;a.;True;b. False;2293. Question TF #12;A qualifying heir can make the ? 2032A special valuation election even if he is;not sure that he will keep the property for the full 10 years.;a.;True;b. False;2294. Question TF #13;A recapture of special use valuation will not occur if a qualified heir ceases;to use the property for farming purposes but does not otherwise dispose of it.;a.;True;b. False;2295. Question TF #14;The recapture of special use valuation estate tax savings could have income tax;implications.;a.;True;b. False;2296. Question TF #15;Any recapture of special use valuation estate tax savings is imposed on the;executor of the estate.;a.;True;b. False;2297. Question TF #16;One way to dispute the existence of large goodwill is to argue that the;decedent was a key person in the operation of the business.;a.;True;b. False;2298. Question TF #17;Application of the blockage rule has been limited to just the valuation of;stocks and bonds and not to other assets.;a.;True;b. False;2299. Question TF #18;A discount for valuation purposes is allowed when the stock involved represents;a minority interest.;a.;True;b. False;2300. Question TF #19;When stock in a public corporation is traded, a discount for lack of;marketability may be available.;a.;True;b. False;2301. Question TF #20;Buy and sell agreements can be used to help solve the estate tax valuation;problems involved in the transfer by death of an interest in a small business.;a.;True;b. False;2302. Question TF #21;If a stock redemption is to be carried out, a cross-purchase type of buy and;sell agreement must be involved.;a.;True;b. False;2303. Question TF #22;One of the advantages of an estate freeze is that the common stock is not;included in the gross estate of the donor.;a.;True;b. False;2304. Question TF #23;In an estate freeze, the common stock is taxed twice?first upon the gift, and;second when the donor dies.;a.;True;b. False;2305. Question TF #24;When carrying out an estate freeze with family limited partnerships, the donors;make gifts of the general partnership interests but retain the limited;partnership interests.;a.;True;b. False;2306. Question TF #25;A donee?s income tax basis in property received as a gift will include any gift;tax paid by the donor.;a.;True;b. False;2307. Question TF #26;As to property received as a gift, a donee?s income tax basis for gain or loss;may not be the same.;a.;True;b. False;2308. Question TF #27;Richard and Marie are joint tenants in a tract of land. Upon Richard?s prior;death, Marie?s income tax basis in the land does not change.;a.;True;b. False;2309. Question TF #28;Rick and Gail are equal tenants in common in real estate. Upon Gail?s prior;death, Rick?s basis in the real estate does not change.;a.;True;b. False;2310. Question TF #29;The election by an estate of ? 2032A (special use valuation as to real estate);or ? 2032 (the alternate valuation date) will have no effect on the income tax;basis of the property received by the heirs.;a.;True;b. False;2311. Question TF #30;Brad and Heather are husband and wife and live in New Mexico. Under Brad?s;will, his share of the community property passes to the children. Upon Brad?s;prior death, there will be a change in Heather?s income tax basis in her half;of the community property.;a.;True;b. False;2312. Question TF #31;Jim makes a gift of property (basis of $800,000, fair market value of $600,000);to his wife, Molly. Six months later Molly dies, and under her will, the;property (now worth $700,000) returns to Jim. Jim?s income tax basis in the;property now is $800,000.;a.;True;b. False;2313. Question TF #32;If a traditional IRA is subject to both estate and income taxes, a withdrawal;by the heir constitutes income in respect of a decedent (IRD).;a.;True;b. False;2314. Question TF #33;The special use valuation method of ? 2032A is available for valuing transfers;by gift.;a.;True;b. False;2315. Question TF #34;Joan made taxable gifts of cash in 2009 and 2010. If Joan dies in 2011, for;2032A purposes only the gift in 2010 is considered in meeting the special use;valuation tests.;a.;True;b. False;2316. Question TF #35;The Nelsons make gifts of appreciated securities to their dependent daughter;(age 20) and son (age 21), both of which are students. If the children sell the;securities shortly thereafter, the kiddie tax will not apply to tax the gain at;the parents? tax rate.;a.;True;b. False;2317. Question TF #36;Passing installment notes by death will not avoid any income tax on the;deferred gain.;a.;True;b. False;2318. Question TF #37;Neither the transfer by gift or by death avoids the recognition (for income tax;purposes) of any deferred interest on U.S. savings bonds.;a.;True;b. False;2319. Question TF #38;A gift of installment notes causes any deferred gross profit on the notes to be;taxed to the donees.;a.;True;b. False;2320. Question TF #39;If depreciable property is transferred by gift, any depreciation recapture;potential carries over to the donee.;a.;True;b. False;2321. Question TF #40;If depreciable property is passed by death, any depreciation recapture;potential carries over to the heir.;a.;True;b. False;2322. Question TF #41;Under Cindy?s will, her share of their community property passes to Van, her;surviving spouse. Cindy?s property is;notsubject to probate.;a.;True;b. False;2323. Question TF #42;Harvey owns a certificate of deposit listed as: ?Harvey, payable on proof of;death to April.? On Harvey?s prior death, the CD is not subject to probate.;a.;True;b. False;2324. Question TF #43;Paula owns an insurance policy on her life payable to her estate. On Paula?s;death, the insurance proceeds are included in her gross estate but not her;probate estate.;a.;True;b. False;2325. Question TF #44;Walt owns an insurance policy on his life with Doris as the designated;beneficiary. On Walt?s prior death, the proceeds of the policy are part of his;probate estate.;a.;True;b. False;2326. Question TF #45;Ten years ago, Austin purchased a residence listing ownership as tenants by the;entirety with his wife, Jean. In the current year, Austin predeceases Jean. As to;the residence, nothing is included in Austin?s probate estate.;a.;True;b. False;2327. Question TF #46;Two years ago, Ellen created a revocable trust?life estate to her children;remainder to her grandchildren. When Ellen dies in the current year, none of;the trust is included in her probate estate.;a.;True;b. False;2328. Question TF #47;Several years ago, Tad purchased land listing ownership as ?Tad, Ellen, and;Kay, equal tenants in common.? In the current year, Kay dies first. None of the;value of the land is included in Kay?s probate estate.;a.;True;b. False;2329. Question TF #48;Cost and time are usually saved by passing ownership to out-of-state real;estate by death rather than by gift.;a.;True;b. False;2330. Question TF #49;Derrick dies, and under the terms of his will, all of his property passes;outright to Dion (Derrick?s surviving wife). Under these circumstances, there;is no need for Derrick?s executor to make a QTIP election.;a.;True;b. False;2331. Question TF #50;The deferral approach to the estate tax marital deduction (as opposed to the;equalization approach) is advisable if the surviving spouse is in poor health;and has many assets.;a.;True;b. False;2332. Question TF #51;Under proper circumstances, a disclaimer by an heir may increase the charitable;deduction allowed a decedent.;a.;True;b. False;2333. Question TF #52;Because of the estate tax deduction, a testamentary bequest to charity is;preferable to a lifetime transfer.;a.;True;b. False;2334. Question TF #53;Ramon sells a parcel of land (basis of $100,000, fair market value of $300,000);to his church. As long as the selling price does not exceed $100,000, Ramon;recognizes no gain on the sale.;a.;True;b. False;2335. Question TF #54;Leona sells land held as an investment (basis of $20,000, fair market value of;$200,000) to her church for $20,000. Leona is not allowed a charitable;deduction for income tax purposes since she recovered her cost of $20,000.;a.;True;b. False;2336. Question TF #55;Whether an organization is a qualified;charity for estate tax purposes depends on its status on the date the transfer;takes place, and not when the will is executed.;a.;True;b. False;2337. Question TF #56;Herbert leaves one-half of his estate to his wife, Ramona, and the remainder to;a qualified charity. Herbert?s estate taxes would not be reduced if Ramona disclaims her interest in favor of the;charity.;a.;True;b. False;2338. Question TF #57;A disclaimer by a surviving spouse will generate additional estate tax since it;reduces the amount of marital deduction allowed.;a.;True;b. False;2339. Question TF #58;For the IRS to grant a discretionary extension of time to pay estate taxes;(under ? 6161), the executor need not show that the estate would otherwise;undergo undue hardship.;a.;True;b. False;2340. Question TF #59;In satisfying the more-than-35% test for qualification under ? 6166, interests;in multiple closely held businesses are aggregated when the decedent?s gross;estate includes 20% or more of the value of each such business.;a.;True;b. False;2341. Question TF #60;In satisfying the more-than-35% test of ? 6166 (i.e., extended estate tax;payment schedule relative to an interest in a closely held business), some;prior gifts the decedent may have made must be considered.;a.;True;b. False;2342. Question TF #61;A decedent owned 25% of the voting stock of Siskin Corporation. Siskin has 53;shareholders. The decedent?s estate can still qualify for the ? 6166 election.;a.;True;b. False


Paper#59263 | Written in 18-Jul-2015

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