QUESTION: 221

All the following are conditions that must be met if an otherwise nonqualified terminable interest is to qualify (as QTIP) for the federal estate tax marital deduction EXCEPT:

The surviving spouse must make a qualified disclaimer to all other property in the deceased spouse's estate within 9 months of death.
No person can be given the right to direct that the property go to anyone other than the surviving spouse as long as the surviving spouse is alive.
The surviving spouse must be given a lifetime right to receive all the property's income at least annually.
The deceased spouse's executor must make an irrevocable election to have the property includible in the surviving spouse's gross estate.

Answer(s): A

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Among the assets in a decedent's gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. The relevant facts concerning this estate are:
* Adjusted gross estate $1,600,000
* Fair market value of stock in the
* closely held corporation 700,000
* Funeral expenses 30,000
* Executor's commission 50,000
* Federal and state death tax 160,000

What amount of closely held corporate stock can be redeemed under IRC Section 303 so that the redemption will be treated as a sale or exchange rather than a dividend distribution?

$240,000
0
$700,000
$ 80,000

Answer(s): A

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QUESTION: 223

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

Each individual has an aggregate $1.5 million exemption against GSTT.
Tuition payments made by a grandparent directly to a university for a grandchild's education are exempt from GSTT.
The liability for GSTT falls upon the donee regardless of the type of transfer.
Direct skip gifts by a grandparent of up to $11,000 can be made to each grandchild without GSTT liability due to an annual exclusion.

Answer(s): C

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QUESTION: 224

A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year while still living in the house. The following are relevant facts: The father bought the property in 1980 for $130,000. The fair market value of the property when the gift was made in 1990 was $150,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father's death was
$220,000. The daughter sold the property 3 months after her father's death for $220,000. She had a gain of

0
$140,000
$220,000
$120,000

Answer(s): A

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QUESTION: 221

QUESTION: 222

QUESTION: 223

QUESTION: 224