QUESTION: 137

Which of the following statements concerning estates and trusts is (are) correct?

1. Both estates and trusts come into being by operation of law.
2. The personal representative of an estate and the trustee has similar fiduciary responsibilities.

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

Answer(s): D

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QUESTION: 138

Believing that his death was imminent, a widower gave his son some real estate two years ago and filed a timely gift tax return. The widower died on January 1st of this year. The additional facts are:
* Widower's basis in the real estate $400,000
* Value of the real estate when gifted 1,000,000
* Value of the real estate on date of death 2,000,000
* Amount of gift tax paid by widower 345,800

Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:

The son's income tax basis in the real estate is $2,000,000.
The widower recognized no gain for income tax purposes at the time the gift was made.
The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.
The gift tax paid is brought back into the widower's gross estate at $345,800.

Answer(s): A

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QUESTION: 139

Which of the following statements concerning charitable remainder annuity trusts is correct?

The term of charitable remainder annuity arrangements is limited to 10 years.
It provides a fixed annuity income interest to a qualified charity.
The donor receives an estate tax charitable deduction for the value of the remainder interest.
The interest paid to the charity must be paid at least quarterly.

Answer(s): C

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QUESTION: 140

To determine whether a taxable gift has been made, the Treasury Regulations require that there must initially be a definite finding that the

donor was a close friend or a relative of the donee
property was transferred for less than an adequate and full consideration in money or money's worth
transferor's actual state of mind was such that he intended to make a gift
property transferred was real property or tangible personal property

Answer(s): B

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QUESTION: 137

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QUESTION: 139

QUESTION: 140

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