QUESTION: 153

A father plans to create a trust for the benefit of his 22-year-old son and wishes to take advantage of the gift tax annual exclusion. He has named a bank as trustee. Which of the following trust provisions would cause the gifts to be ineligible to qualify for the gift tax annual exclusion?
1. The trust income is to be paid to the son or accumulated at the discretion of the trustee.
2. The income is to be accumulated until the son reaches age 32 when all accumulated income and principal are to be distributed to him.

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

Answer(s): D

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QUESTION: 154

All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT

a gratuitous transfer of real property to a revocable intervivos trust
an outright, gratuitous transfer of real property in contemplation of death
the gift taxes paid last year on a gratuitous transfer of real property
a gratuitous transfer of real property with a reserved right to use and enjoy it for life

Answer(s): B

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QUESTION: 155

All the following will be brought back into the donor's gross estate for federal estate tax purposes EXCEPT

a gratuitous transfer of real property to a revocable intervivos trust
an outright, gratuitous transfer of real property in contemplation of death
a gratuitous transfer of real property with a reserved right to use and enjoy it for life
the gift taxes paid last year on a gratuitous transfer of real property

Answer(s): B

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