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Exam 27: The Federal Gift and Estate Taxes

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Question 61

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Classify each statement appearing below. -Cash donation to the reelection campaign of a candidate for the U.S.Congress.

A) No taxable transfer occurs
B) Gift tax applies
C) Estate tax applies

D) A) and B)
E) A) and C)

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Question 62

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Murray owns an insurance policy on the life of his father,Logan.Upon Logan's death,the policy proceeds of $2,000,000 are paid to the designated beneficiary,Grace.What are the transfer tax consequences resulting from Logan's death,based on the following independent assumptions? a.Grace is Murray's daughter. b.Grace is Murray's wife. c.What are the tax consequences if Murray dies first (i.e., predeceases both Grace and Logan)?

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Question 63

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Classify each statement appropriately. -Casualty loss to property after the death of the owner.

Classify each statement appearing below. -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 of the independent statements appearing below. -Ten cemetery lots purchased by decedent prior to death for use by himself and his family.

Stacey inherits unimproved land (fair market value of $6 million) from her father on June 1,2017.Stacey disclaims her interest in the property as follows: one-third on December 1,2017; one-third on January 3,2018; and the remaining one-third on May 31,2018.In all cases,the disclaimers pass the interest to her son (the next heir under state law) .The Federal gift tax applies to Stacey for:

Homer and Laura are husband and wife.At the time of Homer's death,they owned the following: land as tenants by the entirety worth $2,000,000 (purchased by Homer) and stock as equal tenants in common worth $3,000,000 (purchased by Laura) .Homer owns an insurance policy on his life (maturity value of $1,000,000) with Laura as the designated beneficiary.Homer's will passes all his property to Laura.How much marital deduction is allowed Homer's estate?

At the time of her death,Sophia was a participant in her employer's qualified pension plan.Her accrued balance in the plan is as follows. ​ Sophia also was covered by her employer's group term life insurance program.Her policy (maturity value of $100,000) is made payable to Aiden (Sophia's husband).Aiden is also the designated beneficiary of the pension plan. a.Regarding these assets, how much is included in Sophia's gross estate? b.In Sophia's taxable estate? c.How much gross income must Aiden recognize, when collecting on these items?

Classify each of the independent statements appearing below. -Bank account held as joint tenant with mother.Mother provided all of the funds.Mother survives.

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

Reba purchases U.S.savings bonds which she lists in the name of Rod,Reba's son.The purchase of the bonds does not constitute a gift.

A surviving spouse's share of the community property is not included in the deceased spouse's gross estate.

In which of the following situations is Polly's property ownership interest not lost by her death?

Under certain circumstances,the gift-splitting election can be made even though the electing spouses are no longer married to each other.

In which,if any,of the following independent situations can the alternate valuation date be elected?

In 2007,Daniel and Mia acquire realty for $2 million,with Daniel furnishing $1.5 million of the purchase price and Mia providing the balance.Title to the property is listed as: "Daniel and Mia,joint tenants with right of survivorship." This year Mia dies first when the realty is worth $4 million.How much is included in Mia's gross estate under the following circumstances? a.Daniel and Mia are brother and sister. b.Daniel and Mia are husband and wife.

Concerning the Federal tax on generation-skipping transfers:

On the date of her death,Ava owned the following. As to these items,how much is included in Ava's gross estate?

Under his grandfather's will,Thad is entitled to receive shares of Kroger Corporation.For Federal tax purposes,Thad is allowed to disclaim some of these shares and accept the others.

Waldo is his mother's sole heir and is the designated executor of her estate.Although the alternate valuation date would yield a smaller gross estate and less estate tax liability,the election is not made.Instead,Waldo files a Form 706 for his mother's estate using higher date of death values.Why?