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QUESTION: 86

A father plans to create a trust for the benefit of his 22-year-old son and wishes to take advantage of the gift tax annual exclusion. He has named a bank as trustee. Which of the following trust provisions would cause the gifts to be ineligible to qualify for the gift tax annual exclusion?
1. The trust income is to be paid to the son or accumulated at the discretion of the trustee.
2. The income is to be accumulated until the son reaches age 32 when all accumulated income and principal are to be distributed to him.

1 only
Both 1 and 2
Neither 1 nor 2
2 only

Answer(s): B

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QUESTION: 87

Income earned but unpaid at the time of a decedent's death is deemed to be income in respect of a decedent (IRD). All the following statements concerning IRD are correct EXCEPT:

The income must be reported on the decedent's final federal income tax return.
IRD includes sales commissions earned prior to the decedent's death and paid to the estate according to the intestacy laws.
The income is taxable to the person or entity receiving it.
The income may be included on both the estate tax return and the estate income tax return with a corresponding deduction.

Answer(s): A

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QUESTION: 88

Which of the following statements concerning a grantor-retained annuity trust (GRAT) is correct?

The transfer of property to the trust becomes a completed gift for gift tax purposes only at the termination of the grantor's retained interest term.
The trust is used as a device for shifting income tax on the current trust income to there mainder person(s).
If the grantor dies before the retained interest term ends, the estate tax benefits are reduced.
The grantor retains control of the trust property until revocation or death.

Answer(s): C

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QUESTION: 89

A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required
EXCEPT:

He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.
His refusal to accept the inheritance must be received by the executor of his father's estate within 9 months of his father's death.
His refusal to accept the inheritance must be in writing.
His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

Answer(s): D

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QUESTION: 90

Mr. Barlow died early this year. Under the terms of his will he left all his real estate and tangible personal property to his son. All the remainder of his probate estate was left to his wife, Mrs.
Barlow. The following is a list of Mr. Barlow's probate assets and their fair market values at the time of his death:
* Commercial real estate $150,000
* Furniture and fixtures 75,000
* Listed common stock 300,000
* Other securities 200,000

In addition, Mr. Barlow also owned a $100,000 life insurance policy on his life with Mrs. Barlow designated as beneficiary. Based on this information, what is the amount of property in Mr. Barlow's estate qualifying for the federal estate tax marital deduction?

$825,000
$500,000
$400,000
$600,000

Answer(s): D

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Free HS-330 Exam Braindumps HS-330 Fundamentals of Estate Planning Test Questions 86–90 (page: 19)

QUESTION: 86

QUESTION: 87

QUESTION: 88

QUESTION: 89

QUESTION: 90

Free HS-330 Exam Braindumps
HS-330 Fundamentals of Estate Planning Test Questions 86–90 (page: 19)