Question 1

Classify each statement appearing below.
a. No taxable transfer occurs 
b. Gift tax applies
c. Estate tax applies
-Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace predeceases Nadine.

Accepted Answer

The answer of Classify each statement appearing below.
a. No taxable...

Question 2

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Selling expenses incurred to sell estate assets in order to pay administration expenses.

Accepted Answer

The answer of Classify each statement appropriately.
a. Deductible from the...

Question 3

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Interest on municipal bonds accrued after death.

Accepted Answer

Interest on municipal bonds accrued after the death of the bondholder is not considered part of the decedent's gross estate. The estate includes assets and interests the decedent owned at the time of death, and since the interest accrues after death, it is not included.

Question 4

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Post-death property taxes paid to the county on realty included in the gross estate.

Accepted Answer

The answer of Classify each statement appropriately.
a. Deductible from the...

Question 5

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-State death tax imposed on the estate.

Accepted Answer

State death taxes imposed on the estate are deductible from the gross estate in arriving at the taxable estate, according to federal tax laws. This deduction helps to lower the overall taxable estate value.

Question 6

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Land held as tenants by the entirety with surviving spouse. Decedent provided none of the funds.

Accepted Answer

Property held as tenants by the entirety, especially when involving a surviving spouse, is generally included in the decedent's gross estate for estate tax purposes, regardless of who provided the funds for its purchase.

Question 7

Classify each statement appearing below.
a. No taxable transfer occurs 
b. Gift tax applies
c. Estate tax applies
-Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary. Four years later Jim dies, and Susan collects the insurance proceeds.

Accepted Answer

The answer of Classify each statement appearing below.
a. No taxable...

Question 8

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Cash dividends on stock owned by the decedent (declaration and record dates preceded death but payment date was after death).

Accepted Answer

The answer of Classify each of the independent statements appearing...

Question 9

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Casualty loss to property after the death of the owner.

Accepted Answer

The answer of Classify each statement appropriately.
a. Deductible from the...

Question 10

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Casualty loss to property before the death of the owner.

Accepted Answer

Casualty losses to property before the death of the owner are not deductible from the gross estate in arriving at the taxable estate. These losses are considered personal losses and do not affect the valuation of the estate for tax purposes.

Question 11

Classify each statement appearing below.
a. No taxable transfer occurs 
b. Gift tax applies
c. Estate tax applies
-Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace later withdraws all of the funds.

Accepted Answer

When Horace establishes a savings account with Nadine as joint tenants with right of survivorship using his own funds and later withdraws all the funds, no taxable transfer occurs because the funds remain under his control and ownership. The designation of joint tenancy with right of survivorship does not constitute a completed gift for tax purposes until Horace's death or unless Nadine withdraws funds.

Question 12

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-State income tax refund received after death on a tax return filed before death.

Accepted Answer

The answer of Classify each of the independent statements appearing...

Question 13

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Proceeds of an insurance policy on decedent's life. Decedent's son purchased the policy and is its owner and beneficiary.

Accepted Answer

Since the decedent neither owned the insurance policy nor was the beneficiary, the proceeds of the insurance policy are not included in the decedent's gross estate. The ownership and beneficiary status are key factors in determining estate inclusion, and in this case, both are attributed to the decedent's son, not the decedent.

Question 14

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Payment of unpaid gift taxes.

Accepted Answer

The answer of Classify each statement appropriately.
a. Deductible from the...

Question 15

Classify each statement appearing below.
a. No taxable transfer occurs 
b. Gift tax applies
c. Estate tax applies
-Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Accepted Answer

When Horace establishes a savings account with Nadine as joint tenants with right of survivorship and Nadine predeceases Horace, no taxable transfer occurs because the entire property automatically passes to Horace by operation of law, without going through probate or being subject to estate or gift tax at the time of Nadine's death.

Question 16

Classify each statement appropriately.
a. Deductible from the gross estate in arriving at the taxable estate.
b. Not deductible from the gross estate in arriving at the taxable estate.
-Mortgage on land included in gross estate and willed to decedent's children.

Accepted Answer

The answer of Classify each statement appropriately.
a. Deductible from the...

Question 17

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Note receivable issued by a grandson and forgiven by the decedent in her will.

Accepted Answer

The note receivable issued by a grandson and forgiven by the decedent in her will would be included in the decedent's gross estate, as it represents an asset the decedent owned at the time of death. The forgiveness of the debt through the will does not remove it from the estate for tax purposes.

Question 18

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Decedent owned a policy on the life of his spouse with himself as the designated beneficiary. The spouse survives.

Accepted Answer

The policy is included in the decedent's gross estate because the decedent owned the policy and had incidents of ownership over it at the time of death, making it part of the estate for tax purposes.

Question 19

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Ten cemetery lots purchased by decedent prior to death for use by himself and his family.

Accepted Answer

The answer of Classify each of the independent statements appearing...

Question 20

Classify each of the independent statements appearing below.
a. Some or all of the asset is included in the decedent's gross estate. 
b. None of the asset is included in the decedent's gross estate.
-Bank account held as joint tenant with mother. Mother provided all of the funds. Mother survives.

Accepted Answer

The answer of Classify each of the independent statements appearing...

Quiz 27: The Federal Gift and Estate Taxes

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace predeceases Nadine.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Selling expenses incurred to sell estate assets in order to pay administration expenses.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -Interest on municipal bonds accrued after death.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Post-death property taxes paid to the county on realty included in the gross estate.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -State death tax imposed on the estate.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -Land held as tenants by the entirety with surviving spouse. Decedent provided none of the funds.

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary. Four years later Jim dies, and Susan collects the insurance proceeds.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Casualty loss to property after the death of the owner.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Casualty loss to property before the death of the owner.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -State income tax refund received after death on a tax return filed before death.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Payment of unpaid gift taxes.

Classify each statement appearing below. a. No taxable transfer occurs b. Gift tax applies c. Estate tax applies -Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Nadine predeceases Horace.

Classify each statement appropriately. a. Deductible from the gross estate in arriving at the taxable estate. b. Not deductible from the gross estate in arriving at the taxable estate. -Mortgage on land included in gross estate and willed to decedent's children.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -Note receivable issued by a grandson and forgiven by the decedent in her will.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -Ten cemetery lots purchased by decedent prior to death for use by himself and his family.

Classify each of the independent statements appearing below. a. Some or all of the asset is included in the decedent's gross estate. b. None of the asset is included in the decedent's gross estate. -Bank account held as joint tenant with mother. Mother provided all of the funds. Mother survives.