QUESTION: 189

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

Answer(s): C

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QUESTION: 190

A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required EXCEPT:

His refusal to accept the inheritance must be received by the executor of his father's estate within 9 months of his father's death.
He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.
His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.
His refusal to accept the inheritance must be in writing.

Answer(s): C

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QUESTION: 191

Which of the following factors is (are) used to make a choice between having an entity-purchase or cross-purchase partnership buy-sell agreement?
1. The cost basis of the partners' business interests.
2. The amount of the partners? individual personal net worths.

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

Answer(s): A

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QUESTION: 192

Generally the courts will accept as the federal estate tax value of a closely held corporate business the price established by a buy-sell agreement if all the following conditions are met EXCEPT:

The agreement requires a deceased shareholder's executor to sell the stock at the price specified in the agreement.
The agreement as to per-share value is fair, adequate, and made at arm's length.
The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.
The agreement requires a shareholder to first offer his stock to the corporation or other shareholders at the specified price if he wishes to sell it during his lifetime.

Answer(s): C

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Free HS330 Exam Braindumps (page: 49)

QUESTION: 189

QUESTION: 190

QUESTION: 191

QUESTION: 192

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