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Free HS-330 Exam Braindumps
HS-330 Fundamentals of Estate Planning Test Questions 121–125 (page: 26)

Updated On: 9-Feb-2026
Page 26 of 81
PDF with 400 Questions

A wealthy individual might consider selling a substantially appreciated property interest in an installment sale for which of the following reasons?
1. To spread the taxable gain inherent in the property over the period of the installments
2. To provide a buyer who lacks the requisite funds for a lump-sum purchase with the ability to finance the acquisition

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

Answer(s): D



Requirements for property to qualify for the federal estate tax marital deduction include which of the following?
1. The property interest must be includible in the decedent's gross estate.
2. The property must pass in such manner that it will be includible in the surviving spouse's estate at death unless consumed or given away.

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

Answer(s): A



When the owner of a closely held business dies, the payment of a portion of the federal estate tax may be deferred for a period of several years if the estate otherwise qualifies under the provisions of IRC Section 6166. Which of the following statements concerning this deferral of federal estate tax is correct?

  1. Under certain circumstances, the estate will forfeit its right to tax deferral, and all the remaining unpaid estate tax will become due and payable immediately.
  2. The interest rate on the deferred tax is determined by the prime rate in effect on the date of death.
  3. To qualify for the tax deferral, the closely held business must represent more than 50 percent of the value of the decedent's adjusted gross estate.
  4. The interest on the unpaid estate tax is payable over the first 10 years, after which the tax plus interest on the balance is payable in equal installments for the last 5 years.

Answer(s): A



An executor elects to value the assets of the estate at the alternative valuation date 6 months after death. Which of the following statements concerning the estate tax value of assets included in this estate is correct?

  1. Property distributed under the will before the alternate valuation date is valued at the date of death.
  2. Property that has increased in value since the date of death may be valued at the date of death if the executor so elects.
  3. An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.
  4. Property sold before the alternate valuation date is valued at the alternate valuation date.

Answer(s): C



A father wants to accumulate funds for his 12-year-old son's college education. On the advice of his attorney, the father establishes an IRC Section 2503(c) trust and funds it with annual gifts. All the following statements concerning this arrangement are correct EXCEPT:

  1. In the event of the son's death prior to age 21, trust assets must either be payable to the son's estate or be subject to a general power of appointment held by the son.
  2. The trust must be irrevocable.
  3. Any accumulated income and all trust principal must be available for distribution to the son when he attains age 21.
  4. The father's annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.

Answer(s): D



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