Online Access Free HS330 Exam Questions

All the following statements concerning the gift and estate tax chartiable deduction are correct EXCEPT:

• A.A donor is denied a charitable deduction for property that passes to a qualified charity as the result of a qualified disclaimer if the donor original transfer was to anoncharitable donee.
• B.An estate tax charitable deduction is allowed for the full value of property transferred to a qualified charity but only if the property is included in the donor gross estate.
• C.It is possible for a charitable contribution made during the donor lifetime to generate both income and transfer tax deductions for the donor.
• D.If the donor retains an interest in property contributed to a qualified charity during lifetime, the value of the property may be included in the donor gross estate.

Which of the following statements concerning the methods of valuing a closely held business for federal estate tax purposes is (are) correct?
1.The capitalization-of-adjusted-earnings method uses a capitalization rate that varies inversely with the degree of risk and rate of return.
2.The adjusted-book value method involves adjusting the asset components of a business to an approximate fair market value for each component.

• A.2 only
• B.Both 1 and 2
• C.Neither 1 nor 2
• D.1 only

All the following statements concerning a federal estate tax deduction for a bequest or gift to a qualified charity are correct EXCEPT:

• A.A life insurance policy that was assigned to a charity as a gift less than 3 years prior to the insured's death qualifies for a charitable deduction.
• B.The amount of a charitable deduction is reduced by any taxes and administrative expenses chargeable against the bequest.
• C.An estate may deduct the value of the remainder interest in a charitable remainder trust.
• D.The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.

All the following are conditions that must be met if an otherwise nonqualified terminable interest is to qualify (as QTIP) for the federal estate tax marital deduction EXCEPT:

• A.The surviving spouse must make a qualified disclaimer to all other property in the deceased spouse's estate within 9 months of death.
• B.The deceased spouse's executor must make an irrevocable election to have the property includible in the surviving spouse's gross estate.
• C.No person can be given the right to direct that the property go to anyone other than the surviving spouse as long as the surviving spouse is alive.
• D.The surviving spouse must be given a lifetime right to receive all the property's income at least annually.

A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1,500,000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. Which of the following statements concerning this action is (are) correct?
1.If the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.
2.If the husband dies first, the probate costs of his estate could be increased.

• A.2 only
• B.Both 1 and 2
• C.Neither 1 nor 2
• D.1 only