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


A) The election to split gifts under § 2513.
B) The limitation placed on the amount allowed as a charitable contribution for estate tax purposes (§ 2055) .
C) Annual exclusion.
D) Unified transfer tax rates.
E) None of the above.

F) C) and D)
G) A) and C)

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What is the justification for the terminable interest rule that is applicable to the marital deduction?

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The marital deduction is based on the pr...

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In most cases, the gross estate of a decedent is larger than the probate estate.

A) True
B) False

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

A) True
B) False

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At the time of his death, Gene held a Roth IRA account with his wife as the designated beneficiary. The IRA is included in Gene's gross estate.

A) True
B) False

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True

In what manner does the tax law favor contributions to (higher) qualified tuition plans under § 529?

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Income earned by § 529 plans is free of ...

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Match each statement with the correct choice. Some choices may be used more than once or not at all. -Proceeds of an insurance policy on decedent's life. Decedent's son purchased the policy and is its owner and beneficiary.


A) In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B) Death does not defeat an owner's interest in property.
C) Exists only if husband and wife are involved.
D) A type of state tax on transfers by death.
E) Must decrease the amount of the gross estate.
F) Annual exclusion not allowed.
G) Cumulative in effect.
H) Right of survivorship present as to type of ownership.
I) Avoids the terminable interest rule of the marital deduction.
J) Exemption equivalent.
K) Bypass amount.
L) No correct match provided.

M) E) and H)
N) A) and H)

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At the time of his death, Jason was a participant in Silver Corporation's qualified pension plan and group term life insurance. The balance of the survivorship feature in his pension plan is: ?  Contributions by Silver $800,000 After-tax contributions by Jason 400,000 Plan earnings 300,000\begin{array}{ll}\text { Contributions by Silver } & \$ 800,000 \\\text { After-tax contributions by Jason } & 400,000 \\\text { Plan earnings } & 300,000\end{array} ? The term insurance has a maturity value of $100,000. All amounts are paid to Pam, Jason's daughter. One result of these transactions is:


A) Pam must pay income tax on $300,000.
B) Pam must pay income tax on $1,100,000.
C) Jason's gross estate must include $1,200,000.
D) Jason's gross estate must include $1,500,000.
E) None of the above.

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

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The § 2513 election to split gifts is less useful in community property states than in common law states. Explain.

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In community property jurisdictions, the...

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A transfer in trust in which the trustee has the power to accumulate income is not a gift of a future interest if the trustee never exercises the power.

A) True
B) False

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At the time of her death on October 4, 2016, Kaitlyn was involved in the following transactions. ∙ Was the sole life beneficiary of a trust (assets worth $2 million) created 10 years ago by Paul (Kaitlyn's husband) . The transfer was by gift of securities then worth $500,000 (Paul did not make a QTIP election) . Paul and Kaitlyn's children are the remainder persons. ∙ Owned stock in Mauve Corporation (basis of $800,000 and fair market value of $1 million) . On September 7, 2016, a dividend of $48,000 was declared on the stock payable to all shareholders on record as of October 3, 2016. The $48,000 was received by Kaitlyn's executor on October 19, 2016. ∙ Kaitlyn made a taxable gift of $400,000 in 2004. As to these transactions, Kaitlyn's gross estate includes:


A) $1,048,000.
B) $1,448,000.
C) $3,000,000.
D) $3,048,000.
E) None of the above.

F) A) and E)
G) All of the above

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


A) A charitable deduction is available.
B) The alternate valuation date of § 2032 can be elected.
C) A disclaimer procedure may avoid the tax.
D) A marital deduction is available.
E) None of the above.

F) A) and B)
G) B) and E)

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B

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Decedent owned a policy on the life of his spouse with himself as the designated beneficiary. The spouse survives.


A) In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B) Death does not defeat an owner's interest in property.
C) Exists only if husband and wife are involved.
D) A type of state tax on transfers by death.
E) Must decrease the amount of the gross estate.
F) Annual exclusion not allowed.
G) Cumulative in effect.
H) Right of survivorship present as to type of ownership.
I) Avoids the terminable interest rule of the marital deduction.
J) Exemption equivalent.
K) Bypass amount.
L) No correct match provided.

M) J) and K)
N) A) and D)

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A father wants to give a parcel of land to his two children. If he wants the survivor to have sole ownership, he should list ownership of the property as joint tenants.

A) True
B) False

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True

Mitch pays the surgeon and the hospital for his nondependent aunt's heart bypass operation. The transfer is not subject to the gift tax.

A) True
B) False

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


A) The election is made by the executor.
B) Can be elected even though no estate tax return has to be filed.
C) Can be elected only if it reduces the amount of the gross estate or reduces the estate tax liability.
D) Its election does not affect the income tax basis of property included in the gross estate.
E) None of the above.

F) A) and C)
G) B) and C)

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Match each statement with the correct choice. Some choices may be used more than once or not at all. -Surviving spouse's share of the community property.


A) In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B) Death does not defeat an owner's interest in property.
C) Exists only if husband and wife are involved.
D) A type of state tax on transfers by death.
E) Must decrease the amount of the gross estate.
F) Annual exclusion not allowed.
G) Cumulative in effect.
H) Right of survivorship present as to type of ownership.
I) Avoids the terminable interest rule of the marital deduction.
J) Exemption equivalent.
K) Bypass amount.
L) No correct match provided.

M) D) and L)
N) G) and K)

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

A) True
B) False

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Doyle died in 2000 and by will created a trust with the following provisions: "life estate to my wife, Grace, remainder upon her death to our children." Grace dies this year. Is the trust Doyle created included in Grace's gross estate? Explain.

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If Doyle's executor made the QTIP electi...

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Concerning the formula for the Federal estate tax, which, if any, of the following statements is correct?


A) To arrive at the taxable estate, add only post-1976 taxable gifts.
B) The estate tax due is determined by applying the unified transfer tax rate to the taxable estate.
C) In determining the estate tax due, one of the credits allowed is for state death taxes paid.
D) In determining the estate tax due, a credit is allowed for gift taxes paid (or deemed paid) on post-1976 taxable gifts.
E) None of the above statements is correct.

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

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