American College HS330 Practice Questions| TestInsights

Question 1

The estate planning process includes all the following activities EXCEPT:

Athe selection of the estate plan by the financial planner

Bevaluating a client's present estate plan

Cgathering a client's family and financial data

Ddesigning a client's new estate plan

Correct : A

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Athe selection of the estate plan by the financial planner

Bevaluating a client's present estate plan

Cgathering a client's family and financial data

Ddesigning a client's new estate plan

Question 2

All the following statements concerning the generation-skipping transfer tax (GSTT) are correct EXCEPT:

AThe tax may be imposed on direct gifts to grandchildren.

BThe tax may be imposed on gifts in trust to grandchildren.

CAll donors have a cumulative $1.5 million exemption against generation-skipping transfers.

DThe tax is imposed according to a graduated rate schedule similar to the federal estate and gift tax rates.

Correct : D

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AThe tax may be imposed on direct gifts to grandchildren.

BThe tax may be imposed on gifts in trust to grandchildren.

CAll donors have a cumulative $1.5 million exemption against generation-skipping transfers.

DThe tax is imposed according to a graduated rate schedule similar to the federal estate and gift tax rates.

Question 3

All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT:

Aa gratuitous transfer of real property with a reserved right to use and enjoy it for life

Ba gratuitous transfer of real property to a revocable inter vivos trust

Can outright, gratuitous transfer of real property in contemplation of death

Dthe gift taxes paid last year on a gratuitous transfer of real property

Correct : C

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Aa gratuitous transfer of real property with a reserved right to use and enjoy it for life

Ba gratuitous transfer of real property to a revocable inter vivos trust

Can outright, gratuitous transfer of real property in contemplation of death

Dthe gift taxes paid last year on a gratuitous transfer of real property

Question 4

All the following statements concerning ante nuptial agreements are correct EXCEPT:

AThey are frequently used prior to second marriages.

BThey can often deal with a surviving spouse's right to an intestate share of a deceased spouse's estate.

CThey can protect the interests of children of former marriages.

DIncome tax problems are avoided when property is transferred subject to such an agreement.

Correct : D

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AThey are frequently used prior to second marriages.

BThey can often deal with a surviving spouse's right to an intestate share of a deceased spouse's estate.

CThey can protect the interests of children of former marriages.

DIncome tax problems are avoided when property is transferred subject to such an agreement.

Question 5

Tax benefits of making lifetime gifts in excess of the gift tax annual exclusion include all the following EXCEPT:

AThe gift tax paid on a gift made more than 3 years prior to the death of the donor avoids inclusion the donor's gross estate.

BAppreciation in the value of a gift of real property after the date of the gift increases the donor's federal estate tax liability.

CIncome taxes can be saved if a high-income donor gives income-producing property to a lowincome donee.

DGift taxes are payable at the same tax rate as estate taxes.

Correct : B

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AThe gift tax paid on a gift made more than 3 years prior to the death of the donor avoids inclusion the donor's gross estate.

BAppreciation in the value of a gift of real property after the date of the gift increases the donor's federal estate tax liability.

CIncome taxes can be saved if a high-income donor gives income-producing property to a lowincome donee.

DGift taxes are payable at the same tax rate as estate taxes.

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