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American College HS-330 Exam
HS-330 Fundamentals of Estate Planning Test (Page 11 )

Updated On: 7-Feb-2026
Page 11 of 81
PDF with 400 Questions

In which of the following estates would it normally be most desirable to provide for a federal estate tax marital deduction for approximately one half of the property?

  1. In the estate of the spouse with the bulk of the family wealth when only one spouse has substantial wealth
  2. In the estate of the first spouse to die, regardless of the relative wealth of each spouse
  3. In the estate of the first spouse to die when neither spouse has a substantial estate
  4. In the estate of the spouse who does not have the bulk of the family wealth when only one spouse has substantial wealth

Answer(s): A



Which of the following statements concerning the federal income taxation of estates is (are) correct?
1. An estate is entitled to a personal exemption of $300 and a standard deduction.
2. An estate is entitled to a tax deduction for amounts of income distributed.

  1. 2 only
  2. Both 1 and 2
  3. 1 only
  4. Neither 1 nor 2

Answer(s): A



A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:
1. Administration expenses and debts $300,000
2. Marital deduction 800,000
3. Applicable credit amount (2005) 555,800
4. Applicable exclusion amount (2005) 1,500,000
5. State death taxes payable 17,700

Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over $1,000,000 but not over $1,250,000, the tentative tax is
$345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over
$1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000 the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal tax payable is

  1. $47,065
  2. $42,865
  3. 0
  4. $37,035

Answer(s): D



Which of the following statements concerning revocable trusts is correct?

  1. Property of a revocable trust will be included in the grantor's probate property.
  2. A transfer of income-producing property to a revocable trust will result in favorable income tax treatment for the grantor.
  3. A transfer of property to a revocable trust is treated as a completed gift.
  4. The transfer of property to a revocable trust is typically motivated by nontax reasons.

Answer(s): D



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. All the following statements concerning this action are correct EXCEPT:

  1. At the husband's death, his heirs would get a fully stepped-up tax basis for the property.
  2. At the husband's death, it would be easier to qualify his estate for an IRC Section 303 stock redemption of his business interest.
  3. If the husband dies first and leaves the office building outright to his wife, there would be no federal estate tax attributed to its inclusion in his gross estate.
  4. If the husband dies first, the probate costs of his estate could be increased.

Answer(s): B






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