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Exam 27: The Federal Gift and Estate Taxes

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Question 81

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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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Question 82

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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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Question 83

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Georgia owns an insurance policy on the life of Jake,with Scarlet as the designated beneficiary.Upon Scarlet's death,no transfer tax consequences result.

Match each statement with the correct choice. Some choices may be used more than once or not at all. 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.Overrides the terminable interest rule of the marital deduction. j.Exemption equivalent. k.Bypass amount. l.No correct match provided. -Joint tenancy

Barry pays State University for his dependent daughter's room and board.Barry has made a transfer that is subject to the Federal gift tax.

Concerning the Federal tax on generation-skipping transfers:

Cole purchases land for $500,000 and transfers it by gift to his two daughters,Madison and Paige,as equal joint tenants with the right of survivorship.Ten years later,when the land is worth $2,000,000,Madison predeceases Paige.Madison's executor includes none of the value of the land in her gross estate,as she contributed nothing toward its cost.Do you agree?

In which of the following independent situations has Jean made a gift?

Classify each of the independent statements appearing below. -Note receivable issued by a grandson and forgiven by the decedent in her will.

To make the election to split gifts,spouses must file a Form 709 (Federal gift tax return).

Mark dies on March 6.Which,if any,of the following items is not included in his gross estate?

The purpose of the marital deduction is to defer any estate tax liability until the second spouse dies.

In 2015 and with $100,000,Ronald establishes a joint savings account with his cousin,Allison.In 2017,Allison withdraws the $100,000 and disappears.Ronald made a gift to Allison in 2017.

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

Sidney dies and leaves property to his sister Giselle.Thirteen months later,Giselle dies.Giselle's estate can claim a full credit for any Federal estate taxes paid by Sidney's estate as to amounts passing to Giselle.

Andrea dies on April 30.Which,if any,of the following items is included in her gross estate?

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Hector transfers funds to his aunt so she can obtain a much needed hip operation.The aunt does not qualify as Hector's dependent.

Match each statement with the correct choice. Some choices may be used more than once or not at all. 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.Overrides the terminable interest rule of the marital deduction. j.Exemption equivalent. k.Bypass amount. l.No correct match provided. -Community property

Calvin's will passes $800,000 of cash to his widowed sister,Muriel.The estate tax attributable to the cash is $110,000.Muriel dies five years later,and the estate tax generated by the $800,000 is $100,000.How much of a credit for tax on prior transfers will Muriel's estate be allowed?

At the time of her death on June 6,Mary owned the following assets. ​ As to these transactions,how much is included in Mary's gross estate?