QUESTION: 57

Which of the following statements concerning the valuation of intangible personal property in the gross estate of a decedent is correct?

If there were no trades of a listed common stock on the date of the stockholder's death, the stock's value is based on its average daily price for the previous month prior to the shareholder's death.
Certain U.S. Treasury bonds that are used to pay federal estate taxes at par are valued at their market price on the date of death of the owner.
When a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the "blockage" rule.
Valuing closely held stock requires the consideration of several factors outlined by IRS rulings.

Answer(s): D

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A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $1,200,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm the land if it can be included in his father's estate at its current use value. Additional facts are:

1. Average annual gross rentals from nearby farms of similar acreage are $56,000.
2. Average annual state and local real estate taxes on the farm are $8,000.
3. The interest rate for loans from the Federal Land Bank is 8 percent.

For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

$700,000
$820,000
$600,000
$500,000

Answer(s): C

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QUESTION: 59

Which of the following statements concerning the gift or estate tax charitable deduction is (are) correct?

1. If the donor retains an interest in property contributed to a qualified charity during lifetime, the value of the property may be included in the donor gross estate.
2. An estate tax charitable deduction is allowed for the full value of property transferred to a qualified charity but only if the property is included in the donor gross estate.

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

Answer(s): C

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QUESTION: 60

A wife makes outright gifts of $66,000 this year to her son, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?

Wife $22,000, husband $22,000
Wife $44,000, husband 0
Wife $12,000, husband $32,000
Wife $32,000, husband $32,000

Answer(s): A

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