1.Which, if any, factor should reduce the value of a note receivable included in the gross estate of the holder?

The interest rate provided for is 9%. The note is payable on demand. The note is not supported by collateral. The note is forgiven by the decedent's will. None of the above

2.Pam makes a gift of land (basis of $313,000, fair market value of $913,000) to her granddaughter, Tracy. As a result of the transfer, Pam paid a gift tax of $45,000. Tracy's income tax basis in the land is

$343,000 if the gift was made after 1976. $358,000 if the gift was made after 1976. $328,000 if the gift was made after 1976. $313,000 if the gift was made before 1977. None of the above

3.In April 2011, Tim made a gift of real estate (basis of $900,000, fair market value of $800,000) to his aunt. After the gift, the aunt made $50,000 worth of capital improvements to the property. The aunt died in March 2012, when the property was worth $840,000. Under the aunt's will, the realty passed to Tim. Tim's income tax basis in the property is

$950,000. $900,000. $890,000. $840,000. None of the above

4.In June 2011, Debra made a gift of securities (basis of $613,000, fair market value of $913,000) to her uncle, upon which a gift tax of $60,000 was paid. The uncle died in July 2012, when the securities were worth $950,000. Under the terms of the uncle's will, the securities return to Debra. Debra's income tax basis in the securities is

$613,000. $633,000. $950,000. $970,000. None of the above

5.Lisa has been widowed three times. Her first husband died in 2009, leaving an unused exclusion amount of $3.5 million. Her second husband died in early 2011, leaving the entire $5 million exclusion amount unused. Lisa's third husband died in late 2012 with an unused exclusion amount of $4 million. Lisa's DSUEA is

$3.5 million. $4 million. $5 million. $9 million. $12.5 million.

6.The trustee of the Valdes Trust distributed an asset to Pamela, a qualifying income beneficiary. The assets basis to the trust was $20,000, and its fair market value on the distribution date was $100,000. Which statement is true?(Points : 2)

Lacking any election by the trustee, Pamela's basis in the asset is $20,000. Lacking any election by the trustee, the trust recognizes $80,000 gross income on the distribution. Lacking any election by the trustee, Pamela's basis in the asset is stepped up to $100,000. Assuming that the trustee made an election under 643(e), the trust is allowed a $20,000 distribution deduction for this transaction. Assuming that the trustee made an election under 643(e), Pamela recognizes $80,000 gross income on the distribution.

.7.The Schmidt Trust generated a net operating loss this year of $200,000. The trust terminates December 31. Whitney receives $80,000 of corpus upon termination, and William receives the remaining $120,000. Both Whitney and William are calendar-year taxpayers. How much of this loss can the trust, Whitney, or William deduct?

Neither beneficiary gets a deduction this year. Whitney deducts $200,000. William deducts $120,000. Whitney and William each deduct $100,000. Whitney, William, and the trust each deduct $66,667.

8.The Wright Estate generated distributable net income this year of $200,000, one-fifth of which was tax-exempt interest and the balance of which was long-term capital gain. Peter Wright, the sole income beneficiary of the estate, received a distribution of the entire $250,000 fiduciary income of the entity. How does Peter report the distribution?

$250,000 ordinary income $200,000 long-term capital gain, $50,000 exempt interest $450,000 ordinary income $40,000 long-term capital gain, $160,000 exempt interest $160,000 long-term capital gain, $40,000 exempt interest

9.The Aniston Estate generated distributable net income this year of $200,000, one-fourth of which was tax-exempt interest and the balance of which was long-term capital gain. Paul Aniston, the sole income beneficiary of the estate, received a distribution of the entire $280,000 fiduciary income of the entity. How does Paul report the distribution?

$200,000 ordinary income $280,000 ordinary income $100,000 long-term capital gain, $100,000 exempt interest $140,000 long-term capital gain, $140,000 exempt interest $150,000 long-term capital gain, $50,000 exempt interest

10.Three months after Emma died, her executor received the final $10,000 installment of Emma's Super Lottery winnings from the state. Which statement is true?

The $10,000 is included only in Emma's gross estate. The $10,000 is subject to tax only on her estate's income tax return. The $10,000 is subject to neither income nor estate tax because it was received after Emma's death. The $10,000 is both included in Emma's gross estate and subject to tax on her estate's income tax return. None of the above