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 Question 2. 2. With respect to a stock interest in a closely held corporation, which, if any, factor works to increase the gross estate value of the interest? The stock is not marketable. A majority interest is involved. The profits of the business are less than the industry average. The blockage rule applies. None of the above Question 3. 3. In 1990, Jude, a resident of New Jersey, purchased realty for $500,000, listing title as "Jude and Ben, joint tenants with right of survivorship." In 2012, Jude predeceased Ben when the realty was worth $2,000,000. Ben's income tax basis in the property is $250,000. $1,000,000. $1,250,000. $2,250,000. $0. Question 4. 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 Question 5. 5. Which, if any, procedure reduces both Ned's gross estate and probate estate? Five years ago, Ned made a gift of an insurance policy on his life to his daughter (the designated beneficiary). Four years ago, Ned named his wife as the designated beneficiary of his IRA. (Previously, Ned's estate was the designated beneficiary.) Using her funds, Ned's wife purchased real estate, listing herself and Ned as "tenants by the entirety with right of survivorship." Ned purchased a CD, listing title as "Ned, payable on proof of death to Eileen." Eileen is Ned's niece. None of the above Question 6. 6. The income of a grantor trust is taxable to which taxpayer? The grantor The trust The beneficiaries The trust and/or the beneficiaries (Income not distributed is taxed to the trust, and income distributed is taxed to the beneficiaries.) None of the above Question 7. 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. Question 8. 8. During the current year, a trust received $80,000 of taxable interest income, paid trustee's commissions of $8,000, and had no other income or expenses. The trust instrument requires that $40,000 be paid annually to Antoinette and $80,000 be paid annually to George. How much gross income must Antoinette and George recognize? $40,000 by Antoinette and $80,000 by George $40,000 by Antoinette and $40,000 by George $24,000 by Antoinette and $48,000 by George $36,000 by Antoinette and $36,000 by George None of the above Question 9. 9. The Jain Trust is required to pay its entire annual accounting income to Sam and Janet. The trust's personal exemption is $600. $300. $100. $0. None of the above Question 10. 10. This year, the Nano Trust reported $50,000 entity accounting income and $40,000 distributable net income (DNI). Nano distributed $60,000 cash to Horatio, its sole income beneficiary. Nano is a simple trust. Nano's distribution deduction is $40,000. $50,000. $60,000. $0