Question 1

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest 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 2

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Darlene holds a general power of appointment over the income from a trust created by her brother.Darlene dies during the year without having exercised the power.The income is distributed to children of the brother in accordance with the terms of the trust instrument.

Accepted Answer

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

Question 3

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Harry reimburses his niece for the tuition she paid to attend Drake University.The niece does not qualify as Harry's dependent.

Accepted Answer

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

Question 4

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Hugh loans his adult daughter,Nadia,$800,000 to start her own business.No interest is provided for,and Nadia signs a note that is payable in four years.

Accepted Answer

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

Question 5

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest 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 6

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Under a prenuptial agreement,Herbert transfers stock to Norma.One month later,Herbert and Norma are married.

Accepted Answer

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

Question 7

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Under her father's will,Faith is to receive 10,000 shares of GE common stock.Eight months after her father's death,Faith disclaims 5,000 shares.

Accepted Answer

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

Question 8

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

Accepted Answer

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

Question 9

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest 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...

Question 10

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

Accepted Answer

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

Question 11

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest included in the decedent's gross estate
-Surviving spouse's share of the community property.

Accepted Answer

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

Question 12

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest included in the decedent's gross estate
-Dower interest claimed by decedent's surviving spouse.

Accepted Answer

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

Question 13

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Hugh loans his adult daughter,Nadia,$800,000 to start her own business.Market rate interest is provided for,and Nadia signs a note that is payable in four years.Hugh dies two years later and,in his will,cancels the note.Nadia's business proved to be successful.

Accepted Answer

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

Question 14

Classify each of the independent statements appearing below.
a.Some or all of the interest included in the decedent's gross estate.
b.None of the interest 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 15

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Darlene holds a special power of appointment over the income from a trust created by her brother.During the year,Darlene exercises the power in favor of one of the beneficiaries designated in the trust instrument.

Accepted Answer

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

Question 16

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Van takes out an insurance policy on his life and designates Myrna as the beneficiary.Myrna dies first.

Accepted Answer

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

Question 17

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-In full settlement of her marital rights,Henry transfers property to his wife,Nancy.Three months later,Henry and Nancy are divorced.

Accepted Answer

The transfer of property to a spouse in full settlement of marital rights, especially in the context of a divorce, is generally considered a division of property rather than a taxable gift or estate transfer. Therefore, no taxable transfer occurs under the gift or estate tax provisions.

Question 18

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Under her father's will,Faith is to receive 10,000 shares of GE common stock.Fifteen months after her father's death,Faith disclaims the 10,000 shares.

Accepted Answer

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

Question 19

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

Accepted Answer

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

Question 20

Classify each statement appearing below.
a.No taxable transfer occurs
b.Gift tax applies
c.Estate tax applies
-Van takes out an insurance policy on Myrna's life and designates himself as the beneficiary.Myrna is Van's wife.Two years later,Myrna dies,and Van collects the insurance proceeds.

Accepted Answer

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

Quiz 17: The Federal Gift and Estate Taxes

Classify each of the independent statements appearing below. a.Some or all of the interest included in the decedent's gross estate. b.None of the interest 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 statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Harry reimburses his niece for the tuition she paid to attend Drake University.The niece does not qualify as Harry's dependent.

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Hugh loans his adult daughter,Nadia,$800,000 to start her own business.No interest is provided for,and Nadia signs a note that is payable in four years.

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

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Under a prenuptial agreement,Herbert transfers stock to Norma.One month later,Herbert and Norma are married.

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Under her father's will,Faith is to receive 10,000 shares of GE common stock.Eight months after her father's death,Faith disclaims 5,000 shares.

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

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

Classify each of the independent statements appearing below. a.Some or all of the interest included in the decedent's gross estate. b.None of the interest included in the decedent's gross estate -Surviving spouse's share of the community property.

Classify each of the independent statements appearing below. a.Some or all of the interest included in the decedent's gross estate. b.None of the interest included in the decedent's gross estate -Dower interest claimed by decedent's surviving spouse.

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

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Van takes out an insurance policy on his life and designates Myrna as the beneficiary.Myrna dies first.

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -In full settlement of her marital rights,Henry transfers property to his wife,Nancy.Three months later,Henry and Nancy are divorced.

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Under her father's will,Faith is to receive 10,000 shares of GE common stock.Fifteen months after her father's death,Faith disclaims the 10,000 shares.

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

Classify each statement appearing below. a.No taxable transfer occurs b.Gift tax applies c.Estate tax applies -Van takes out an insurance policy on Myrna's life and designates himself as the beneficiary.Myrna is Van's wife.Two years later,Myrna dies,and Van collects the insurance proceeds.