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American College HS-330 Exam
HS-330 Fundamentals of Estate Planning Test (Page 5 )

Updated On: 7-Feb-2026
Page 5 of 81
PDF with 400 Questions

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 father's annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.
  3. The trust must be irrevocable.
  4. Any accumulated income and all trust principal must be available for distribution to the son when he attains age 21.

Answer(s): B



Which of the following statements concerning the estate tax marital deduction is correct?

  1. The marital deduction available to a decedent in a common-law state is limited to a maximum of $1 million.
  2. The marital deduction available to a decedent in a common-law state is equal to the net amount of qualifying property passing to the surviving spouse.
  3. The marital deduction available to a decedent in a community-property state is equal to the total amount of community property.
  4. The marital deduction available to a decedent in a common-law state is equal to one half the adjusted gross estate.

Answer(s): B



All the following statements concerning real property ownership by married couples as joint tenants with right of survivorship are correct EXCEPT:

  1. Jointly held property between spouses does not pass through the probate estate of the first spouse to die.
  2. In common-law states the total value of the property receives a stepped-up tax basis in the estate of the first spouse to die.
  3. All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse's estate.
  4. The deceased spouse's interest in the property qualifies for the marital deduction since it passes outright to the surviving spouse.

Answer(s): B



A wife makes outright gifts of $40,000 to her son this year, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?

  1. Wife $9,000, husband $9,000
  2. Wife 0, husband $18,000
  3. Wife $18,000, husband 0
  4. Wife $19,000, husband $19,000

Answer(s): A



Which of the following transactions is a taxable gift for federal gift tax purposes?

  1. A grandmother purchased a U.S. savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.
  2. A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.
  3. A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.
  4. A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.

Answer(s): C



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