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Exam 25: Transfer Taxes and Wealth Planning

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Question 71

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Ricardo transferred $1,450,000 of cash to State University for a new sports complex. Calculate the amount of the taxable gift.

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Zero.
The gift qualifies for an annual e...

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Question 72

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The debts of the decedent at the time of death are deducted in calculating the taxable estate.

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B) False

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Question 73

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James and Jasmine live in a community-property state. This year they transferred $800,000 of property to an irrevocable trust that provides their son, Aaron, a life estate and their daughter, Lauren, the remainder. At the time of the gift, the Table S value for Aaron was .18031. What is the amount, if any, of the taxable gifts?

At his death in 2020, Nathan owned the following property: The real estate is subject to a $1,700,000 mortgage and Nathan made taxable gifts in 2009 totaling $2 million, at which time he offset the gift tax with an applicable credit (exemption equivalent of $2 million). Nathan has never been married. What is the amount of his estate tax due? (Use Exhibit 25-1.)

Harold and Mary are married and live in a community-property state. During the marriage Harold bought a parcel of real estate for $100,000 in community funds and titled the property in his name alone. Mary died on January 30 ^th of this year and was survived by Harold, who did not remarry. The parcel of real property was worth $250,000 on January 30 ^th of this year but was only worth $220,000 at year-end. What amount, if any, is included in Mary's gross estate?

The executor of Isabella's estate incurred administration expenses of $33,750 and paid $9,650 in funeral expenses. The executor charged the estate for $30,100 in fees. What is the maximum amount Isabella's estate can deduct in computing the adjusted gross estate?

Which of the following is a true statement?

Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy.

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $42,250. What is the amount of the taxable gift?

This year Anthony transferred $250,000 of bonds to a trust with directions to the trustee to pay income to his son for the next 20 years. After 20 years the trust corpus would revert to Anthony. Which of the following is a true statement?

Ryan placed $280,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate). At the time of the gift, given the prevailing interest rate, Stephen's life estate was valued at $165,000 and the remainder at $115,000. What is the amount, if any, of Ryan's taxable gifts?

Which of the following transfers is a complete gift?

Angel and Abigail are married and live in a common-law state. Angel and Abigail own a parcel of realty as joint tenants with the right of survivorship. In addition, Abigail owns another parcel of realty in her name alone. If Abigail should die when the jointly owned realty is worth $1 million and her own parcel of realty is worth $1.5 million, what is the total value of realty that would be included in Abigail's gross estate?

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.

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

The applicable credit is designed to:

Ryan placed $360,000 in trust with income to Stephen for his life and the remainder to Kayla (or her estate). At the time of the gift, given the prevailing interest rate, Stephen's life estate was valued at $197,000 and the remainder at $163,000. What is the amount, if any, of Ryan's taxable gifts?

Chloe's gross estate consists of the following property valued at the date of death: Chloe's real estate is encumbered by a mortgage of $450,000, and Chloe's executor paid her funeral costs of $6,000 and charged fees for $24,000. Which of the following is a true statement?

Harold and Mary are married and live in a community-property state. During the marriage Harold bought a parcel of real estate for $210,000 in community funds and titled the property in his name alone. Mary died on January 30^th of this year and was survived by Harold, who did not remarry. The parcel of real property was worth $420,000 on January 30^th of this year but was only worth $357,000 at year-end. What amount, if any, is included in Mary's gross estate?

A bypass provision in a will requires a decedent to have a taxable estate in order to use an applicable credit to reduce total estate taxes on a married couple.