QUESTION: 41

For estate tax a purpose which of the following is (are) a form of charitable gifts that may qualify for the charitable deduction?
1. Split gifts
2. Charitable remainder trusts

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

Answer(s): D

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A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets. Which of the following courses of action will best accomplish these objectives?

Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds
Purchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her
Make her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself
Make her a gift of enough corporate bonds from his portfolio so that she will be able to support herself from the interest payments

Answer(s): C

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QUESTION: 43

All the following statements concerning the generation-skipping transfer tax (GSTT) are correct EXCEPT:

The tax is imposed according to a graduated rate schedule similar to the federal estate and gift tax rates.
The tax may be imposed on gifts in trust to grandchildren.
The tax may be imposed on direct gifts to grandchildren.
All donors have a cumulative $1.5 million exemption against generation-skipping transfers.

Answer(s): A

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QUESTION: 44

In which of the following situations will the grantor be taxed on income from trust property.
1. The grantor of a trust gives one of the trust beneficiaries the right to add or delete beneficiaries.
2. An adverse party to the grantor holds the power to determine the timing of trust distributions to the beneficiaries.

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

Answer(s): A

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QUESTION: 41

QUESTION: 42

QUESTION: 43

QUESTION: 44