Exam 25: Transfer Taxes and Wealth Planning

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A) Form 709 is due by the 15^th day of the ninth month following the date of the gift.
B) Form 709 must be filed if a taxpayer wishes to elect gift splitting.
C) Form 709 need not be filed unless a taxpayer's taxable gifts exceed the exemption equivalent.
D) Form 709 is due nine months after the death of the decedent.
E) None of these is true.

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A) A unified credit of up to $1 million reduces the tax on any transfer.
B) An annual exclusion offsets any transfer up to $14,000.
C) An election can be made to split a transfer between spouses.
D) A charitable and a marital deduction are allowed in computing the taxable transfer.
E) All of these are true.

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A) The same transfer tax rate schedule is used to calculate both the estate tax and the gift tax.
B) The transfer tax rate schedule is regressive in nature.
C) The amount of the unified credit varies according to whether the taxable transfer is intervivos or testamentary.
D) The exemption equivalent automatically offsets transfers in calculating cumulative taxable transfers.
E) All of these are true.

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A) $386,000
B) $59,000
C) $374,000
D) $324,000
E) None of these.

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A) $3,000
B) $32,000
C) $45,000
D) zero - none of the gifts exceed the annual exclusion.
E) None of these.

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Zero.
Explanation: The gift qualifies fo...

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A) $85,000
B) $85,000 if Tyrone had an incident of ownership of the policy at the time of his death.
C) zero if Tyrone did not transfer any ownership of the policy within three years of his date of death.
D) zero - life insurance proceeds due to the death of the decedent are not included in the gross estate.
E) zero if Tyrone's estate uses the insurance proceeds to pay Tyrone's estate tax.

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$940,000 and $1,060,000, respe...

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A) Executor's fees paid by an estate are deductible in computing the gross estate.
B) Funeral expenses for the decedent paid by an estate are deductible in computing the adjusted gross estate.
C) An executor can choose to deduct the decedent's funeral expenses on either the estate tax return or the estate's income tax return.
D) An executor can only deduct the costs of administering the decedent's estate on the estate's income tax return.
E) None of these is true.

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A) $1,000
B) $14,000
C) $28,000
D) zero if Andrew and Brianna elect to split gifts.
E) None of these.

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A) $22 million is included in Jose's gross estate.
B) $15 million is included in Jose's gross estate.
C) The $7 million mortgage must be paid by Jose's estate.
D) The $7 million mortgage is not deductible if Jose's will transfers the property to a charity.
E) All of these

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A) Prevent double taxation of previously taxed gifts.
B) Increase the marginal tax rate on previously taxed gifts.
C) Increase the marginal tax rate on the taxable estate.
D) Remove intervivos transfers from cumulative taxable transfers.
E) None of these.

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A) zero - the marital deduction offsets the gift as long as Jayden and Olivia are married by year end.
B) $53,000
C) $67,000
D) zero - this transfer is not gratuitous.
E) None of these.

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