17. The federal gift tax return (Form 709) is generally due

a. on the same day as the individual income tax return for a calendar year taxpayer.

b. on October 15 of the year after the year the gift is made.

c. nine months after the date of death.

d. none of the above.

18 $1,500,000 will pass outright from Grandfather to Grandfather?s grandson, Paul, by virtue of being named as the beneficiary of a bank account in Grandfather's name. Grandfather?s son, John, who is Paul?s father is deceased, having died a week before grandfather. What will this event be?

a. a taxable termination.

b. a taxable distribution.

c. a direct skip.

d. none of the above.

19. Which of the following transactions does not constitute a completed gift for federal gift tax purposes?

a. An outright gift of $100,000 to a United States citizen spouse.

b. A gratuitous transfer of $1,000,000 to an irrevocable trust, with a life estate to the grantor's sister, and the remainder to a grandchild.

c. A year-end bonus of $15,000 to the vice-president of finance from the majority shareholder.

d. All are gifts.

20. What are the gift tax consequences if donor transfers $2 million to donor?s former spouse as a property settlement pursuant to a written divorce agreement?

a. There is no marital deduction available if the donee/former spouse is not a U.S. citizen.

b. The transfer is not considered a gift for federal gift tax purposes.

c. There is a gift, and the marital deduction is available in this case regardless of the citizenship of the donee/former spouse.

d. None of the above is correct.

21. Which of the following statements is accurate?

a. Any taxable gift made by decedent within three years prior to death is includible in the decedent?s gross estate.

b. The alternate valuation date for gift tax purposes is six months after the date of the transfer.

c. There is an estate tax credit available to the donee/decedent?s estate for gift taxes paid by a donor where the donee dies within two years after the date of the gift.

d. There is no gift tax credit available to the donor for gifts received by the donor from the donee within the prior two years.

22. Jack died on July 2, 2011. At his death he had a brokerage account with $2,000,000 worth of stock of a publicly traded company that had purchased his company from him some years ago. The purchase price of his company was $1,000,000. None of the publicly traded stock has been sold since Jack?s death. The brokerage account is a transfer on death account and Jack?s daughter, Jill, is the beneficiary. The balance of Jack?s assets of $5,000,000 pass outright to Jack?s wife, Hillie, under Jack?s will, and Jack had not previously used any portion of his applicable exclusion amount. What is Jill?s basis in the stock publicly traded stock?

a. $1,000,000.

b. $2,000,000.

c. $5,000,000.

d. We do not have sufficient information to make that determination.

23. Which of the following items is not includible in the gross estate of John, the decedent?

a. Gift tax paid on a gift made by John two years before his death.

b. The proceeds of life insurance on John's life where all incidents of ownership were transferred to an irrevocable trust 18 months prior to his death.

c. The present value of a joint and survivorship annuity purchased by John's wife, Frieda.

d. Property subject to John's testamentary general power of appointment.

24. The following statements about Qualified Terminable Interest Property (QTIP) trusts are true, except:

a. A QTIP trust may not be implemented prior to the grantor s death.

b. Only the grantor s spouse may be the income beneficiary, but may refuse to accept the bequest and elect against the will.

c. The QTIP trust is a simple trust and anyone, including a charity, may be the remainderperson.

d. If a trust otherwise qualifies, QTIP treatment may be elected for an undivided portion of the trust, such as 78 percent.

25. Which of the following statements is or are false?

I. Louise, who died in 2012, was survived by her husband, Luis. Louise and Luis husband owned their home as tenants in common. The fair market value of the home on the date of Louise's death was $750,000. Louise provided all of the consideration for the purchase. The entire value of the property (on the date of Louise's death, or the alternate valuation date, whichever is applicable) is includible in Louise's gross estate for federal estate tax purposes.

II. Two brothers, Jeff and David, purchased a vacation home in 1982, as joint tenants with right of survivorship. Jeff contributed $40,000 toward the purchase price and David contributed $60,000. They have records of their contributions. In 2012, when the property was worth $200,000, Jeff died. With respect to the vacation home, $100,000 is includible in Jeff's gross estate for federal estate tax purposes.

III. By the terms of his will, John left his entire estate in trust. The terms of the trust provided that all trust income was to be paid to his wife (who survived him) for her life in at least annual installments. The terms of the trust also gave the trustee discretionary authority to distribute trust principal to his disabled daughter (who survived him) for her support. The trust meets the requirements of a qualified terminable interest property trust (QTIP Trust).

a. I only is false.

b. II only is false.

c. III only is false.

d. I and II are false.

e. I, II, and III are false.

26. Which of the following statements is or are true?

I. John and Mary owned a home as tenants by the entirety. The home was purchased in 1995 for $100,000. John contributed $70,000 toward the purchase price and Mary contributed $30,000. When John died in 2012, the home was worth $300,000. $210,000 will be included in John's gross estate for federal estate tax purposes as the value of his interest in the home.

II. Mark transferred the title to his home to his son, Richard, on January 10, 2008, but Mark retained a life estate in the home. Mark released (that is, relinquished) his life estate in favor of his son, Richard, on July 4, 2009. Mark also established a new residence before he died. Mark died on May 3, 2012. The value of the home as of the date of Mark's death (or the alternate valuation date, if applicable) is not includible in Mark's gross estate for federal estate tax purposes.

a. I only is true.

b. II only is true.

c. Both I and II are true.

d. Neither I nor II is true.

Facts for Questions 27 and 28. Lisa set up a revocable trust on June 20, 20012 to which she transferred all of her assets which were then worth $1,000,000.

Question 27. Lisa died on June 21, 2015. At the date of her death in 2015, the trust assets were worth $1,500,000. The value of the assets of the trust are includible in her gross estate for Federal estate tax purposes.

a. true.

b. false.

c. we do not have sufficient information to answer this question.

d. only if Lisa?s executor so elects.

Question 28. A completed gift was made in 2012 upon the transfer of the $1,000,000 of assets to the trust.

a. true.

b. false.

c. we do not have sufficient information to answer this question.

d. only if Lisa?s executor so elects.

29. Which of the following statements is or are true?

I. If an asset is not subject to probate, then the only time it can be subject to federal estate tax if the property was jointly owned by the decedent with another with right of survivorship or owned by the decedent as tenants by the entirety with his or her spouse.

II. Bob buys a whole life policy on his life with a face value of $100,000. He makes a gift of the policy to his son, Larry, on January 20, 2013, when the policy cash surrender value is $10,000. Larry becomes the policy owner and names himself the beneficiary. Bob retains no incidents of ownership. Bob dies on October 2, 2015. Life insurance proceeds are collected by Larry. The life insurance proceeds will be excluded from Bob's federal gross estate.

III. Mitchell left his entire estate in trust for his son, Monroe. Monroe is to receive all trust income for life. Mitchell also gave Monroe the right to appoint, by the terms of Monroe's will, all trust assets remaining in trust at Monroe's death, to anyone Monroe wishes except to Monroe, Monroe's estate, Monroe's creditors, or the creditors of Monroe's estate. When Monroe dies, trust assets will not be included in his gross estate for federal estate tax purposes.

a. I only is true.

b. II only is true.

c. Both I and II are true.

d. III only is true.

e. All are true.

30. Which, if any, of the following actions reduce both Ned?s gross estate and probate estate?

a.	Ned purchased a CD listing title as ?Ned, payable on proof of death to Eileen.? Eileen is Ned?s niece.
b.	Four years ago, Ned named his wife as the designated beneficiary of his IRA. (Previously, Ned?s estate was the designated beneficiary.)
c.	Five years ago, Ned made a gift of an insurance policy on his life to his daughter (the designated beneficiary).
d.	None of the above
	.

31. Bob died on January 30, 2015. His probate estate and his subchapter J estate include:

a. $1,200 salary due him from his employment.

b. $100,000 life insurance policy payable to his widow.

c. $75,000 IRA naming his widow as beneficiary.

d. $10,000 in joint checking account with a surviving child.

32. Which of the following statements is incorrect?

a. The taxation of trusts and estates is governed by Subchapter J of the Internal Revenue Code.

b. Form 1041 illustrates the semi-conduit theory of income taxation since all taxable income received by a trust or estate is taxed to the beneficiaries.

c. The income tax rates applied to trusts and estates are highly compressed compared to income tax rates for individuals.

d. When Shirley died, her estate included 200 shares of Stock in Corporation. On the date of her death the highest price the Stock traded for was $80 and the lowest price was $72. The estate tax date of death value for the Stock in Corporation is $15,200.

33. Which of the following statements is correct?

a. Estates unlike trusts, are not required to pay estimated income taxes.

b. Estates are not required to pay estimated income taxes on capital gain income.

c. Estates are not required to pay estimated income taxes in their first two years.

d. Estates are not required to pay estimated income taxes in their first two years if all income during the year consists of capital gain income and tax-exempt income.

17. The federal gift tax return (Form 709) is generally due

a. on the same day as the individual income tax return for a calendar year taxpayer.

b. on October 15 of the year after the year the gift is made.

c. nine months after the date of death.

d. none of the above.

18 $1,500,000 will pass outright from Grandfather to Grandfather?s grandson, Paul, by virtue of being named as the beneficiary of a bank account in Grandfather's name. Grandfather?s son, John, who is Paul?s father is deceased, having died a week before grandfather. What will this event be?

a. a taxable termination.

b. a taxable distribution.

c. a direct skip.

d. none of the above.

19. Which of the following transactions does not constitute a completed gift for federal gift tax purposes?

a. An outright gift of $100,000 to a United States citizen spouse.

b. A gratuitous transfer of $1,000,000 to an irrevocable trust, with a life estate to the grantor's sister, and the remainder to a grandchild.

c. A year-end bonus of $15,000 to the vice-president of finance from the majority shareholder.

d. All are gifts.

20. What are the gift tax consequences if donor transfers $2 million to donor?s former spouse as a property settlement pursuant to a written divorce agreement?

a. There is no marital deduction available if the donee/former spouse is not a U.S. citizen.

b. The transfer is not considered a gift for federal gift tax purposes.

c. There is a gift, and the marital deduction is available in this case regardless of the citizenship of the donee/former spouse.

d. None of the above is correct.

21. Which of the following statements is accurate?

a. Any taxable gift made by decedent within three years prior to death is includible in the decedent?s gross estate.

b. The alternate valuation date for gift tax purposes is six months after the date of the transfer.

c. There is an estate tax credit available to the donee/decedent?s estate for gift taxes paid by a donor where the donee dies within two years after the date of the gift.

d. There is no gift tax credit available to the donor for gifts received by the donor from the donee within the prior two years.

22. Jack died on July 2, 2011. At his death he had a brokerage account with $2,000,000 worth of stock of a publicly traded company that had purchased his company from him some years ago. The purchase price of his company was $1,000,000. None of the publicly traded stock has been sold since Jack?s death. The brokerage account is a transfer on death account and Jack?s daughter, Jill, is the beneficiary. The balance of Jack?s assets of $5,000,000 pass outright to Jack?s wife, Hillie, under Jack?s will, and Jack had not previously used any portion of his applicable exclusion amount. What is Jill?s basis in the stock publicly traded stock?

a. $1,000,000.

b. $2,000,000.

c. $5,000,000.

d. We do not have sufficient information to make that determination.

23. Which of the following items is not includible in the gross estate of John, the decedent?

a. Gift tax paid on a gift made by John two years before his death.

b. The proceeds of life insurance on John's life where all incidents of ownership were transferred to an irrevocable trust 18 months prior to his death.

c. The present value of a joint and survivorship annuity purchased by John's wife, Frieda.

d. Property subject to John's testamentary general power of appointment.

24. The following statements about Qualified Terminable Interest Property (QTIP) trusts are true, except:

a. A QTIP trust may not be implemented prior to the grantor s death.

b. Only the grantor s spouse may be the income beneficiary, but may refuse to accept the bequest and elect against the will.

c. The QTIP trust is a simple trust and anyone, including a charity, may be the remainderperson.

d. If a trust otherwise qualifies, QTIP treatment may be elected for an undivided portion of the trust, such as 78 percent.

25. Which of the following statements is or are false?

I. Louise, who died in 2012, was survived by her husband, Luis. Louise and Luis husband owned their home as tenants in common. The fair market value of the home on the date of Louise's death was $750,000. Louise provided all of the consideration for the purchase. The entire value of the property (on the date of Louise's death, or the alternate valuation date, whichever is applicable) is includible in Louise's gross estate for federal estate tax purposes.

II. Two brothers, Jeff and David, purchased a vacation home in 1982, as joint tenants with right of survivorship. Jeff contributed $40,000 toward the purchase price and David contributed $60,000. They have records of their contributions. In 2012, when the property was worth $200,000, Jeff died. With respect to the vacation home, $100,000 is includible in Jeff's gross estate for federal estate tax purposes.

III. By the terms of his will, John left his entire estate in trust. The terms of the trust provided that all trust income was to be paid to his wife (who survived him) for her life in at least annual installments. The terms of the trust also gave the trustee discretionary authority to distribute trust principal to his disabled daughter (who survived him) for her support. The trust meets the requirements of a qualified terminable interest property trust (QTIP Trust).

a. I only is false.

b. II only is false.

c. III only is false.

d. I and II are false.

e. I, II, and III are false.

26. Which of the following statements is or are true?

I. John and Mary owned a home as tenants by the entirety. The home was purchased in 1995 for $100,000. John contributed $70,000 toward the purchase price and Mary contributed $30,000. When John died in 2012, the home was worth $300,000. $210,000 will be included in John's gross estate for federal estate tax purposes as the value of his interest in the home.

II. Mark transferred the title to his home to his son, Richard, on January 10, 2008, but Mark retained a life estate in the home. Mark released (that is, relinquished) his life estate in favor of his son, Richard, on July 4, 2009. Mark also established a new residence before he died. Mark died on May 3, 2012. The value of the home as of the date of Mark's death (or the alternate valuation date, if applicable) is not includible in Mark's gross estate for federal estate tax purposes.

a. I only is true.

b. II only is true.

c. Both I and II are true.

d. Neither I nor II is true.

Facts for Questions 27 and 28. Lisa set up a revocable trust on June 20, 20012 to which she transferred all of her assets which were then worth $1,000,000.

Question 27. Lisa died on June 21, 2015. At the date of her death in 2015, the trust assets were worth $1,500,000. The value of the assets of the trust are includible in her gross estate for Federal estate tax purposes.

a. true.

b. false.

c. we do not have sufficient information to answer this question.

d. only if Lisa?s executor so elects.

Question 28. A completed gift was made in 2012 upon the transfer of the $1,000,000 of assets to the trust.

a. true.

b. false.

c. we do not have sufficient information to answer this question.

d. only if Lisa?s executor so elects.

29. Which of the following statements is or are true?

I. If an asset is not subject to probate, then the only time it can be subject to federal estate tax if the property was jointly owned by the decedent with another with right of survivorship or owned by the decedent as tenants by the entirety with his or her spouse.

II. Bob buys a whole life policy on his life with a face value of $100,000. He makes a gift of the policy to his son, Larry, on January 20, 2013, when the policy cash surrender value is $10,000. Larry becomes the policy owner and names himself the beneficiary. Bob retains no incidents of ownership. Bob dies on October 2, 2015. Life insurance proceeds are collected by Larry. The life insurance proceeds will be excluded from Bob's federal gross estate.

III. Mitchell left his entire estate in trust for his son, Monroe. Monroe is to receive all trust income for life. Mitchell also gave Monroe the right to appoint, by the terms of Monroe's will, all trust assets remaining in trust at Monroe's death, to anyone Monroe wishes except to Monroe, Monroe's estate, Monroe's creditors, or the creditors of Monroe's estate. When Monroe dies, trust assets will not be included in his gross estate for federal estate tax purposes.

a. I only is true.

b. II only is true.

c. Both I and II are true.

d. III only is true.

e. All are true.

30. Which, if any, of the following actions reduce both Ned?s gross estate and probate estate?

a.	Ned purchased a CD listing title as ?Ned, payable on proof of death to Eileen.? Eileen is Ned?s niece.
b.	Four years ago, Ned named his wife as the designated beneficiary of his IRA. (Previously, Ned?s estate was the designated beneficiary.)
c.	Five years ago, Ned made a gift of an insurance policy on his life to his daughter (the designated beneficiary).
d.	None of the above
	.

31. Bob died on January 30, 2015. His probate estate and his subchapter J estate include:

a. $1,200 salary due him from his employment.

b. $100,000 life insurance policy payable to his widow.

c. $75,000 IRA naming his widow as beneficiary.

d. $10,000 in joint checking account with a surviving child.

32. Which of the following statements is incorrect?

a. The taxation of trusts and estates is governed by Subchapter J of the Internal Revenue Code.

b. Form 1041 illustrates the semi-conduit theory of income taxation since all taxable income received by a trust or estate is taxed to the beneficiaries.

c. The income tax rates applied to trusts and estates are highly compressed compared to income tax rates for individuals.

d. When Shirley died, her estate included 200 shares of Stock in Corporation. On the date of her death the highest price the Stock traded for was $80 and the lowest price was $72. The estate tax date of death value for the Stock in Corporation is $15,200.

33. Which of the following statements is correct?

a. Estates unlike trusts, are not required to pay estimated income taxes.

b. Estates are not required to pay estimated income taxes on capital gain income.

c. Estates are not required to pay estimated income taxes in their first two years.

d. Estates are not required to pay estimated income taxes in their first two years if all income during the year consists of capital gain income and tax-exempt income.

17. The federal gift tax return (Form 709) is generally due a. b. c. d. on the same day as the individual income tax return for a calendar year taxpayer. on October 15 of the year after the year the gift is made. nine months after the date of death. none of the above. 18 $1,500,000 will pass outright from Grandfather to Grandfather's grandson, Paul, by virtue of being named as the beneficiary of a bank account in Grandfather's name. Grandfather's son, John, who is Paul's father is deceased, having died a week before grandfather. What will this event be? a. b. c. d. a taxable termination. a taxable distribution. a direct skip. none of the above. 19. Which of the following transactions does not constitute a completed gift for federal gift tax purposes? a. An outright gift of $100,000 to a United States citizen spouse. b. A gratuitous transfer of $1,000,000 to an irrevocable trust, with a life estate to the grantor's sister, and the remainder to a grandchild. c. A year-end bonus of $15,000 to the vice-president of finance from the majority shareholder. d. All are gifts. 20. What are the gift tax consequences if donor transfers $2 million to donor's former spouse as a property settlement pursuant to a written divorce agreement? a. There is no marital deduction available if the donee/former spouse is not a U.S. citizen. b. The transfer is not considered a gift for federal gift tax purposes. c. There is a gift, and the marital deduction is available in this case regardless of the citizenship of the donee/former spouse. d. None of the above is correct. 21. Which of the following statements is accurate? a. Any taxable gift made by decedent within three years prior to death is includible in the decedent's gross estate. b. The alternate valuation date for gift tax purposes is six months after the date of the transfer. c. There is an estate tax credit available to the donee/decedent's estate for gift taxes paid by a donor where the donee dies within two years after the date of the gift. d. There is no gift tax credit available to the donor for gifts received by the donor from the donee within the prior two years. 22. Jack died on July 2, 2011. At his death he had a brokerage account with $2,000,000 worth of stock of a publicly traded company that had purchased his company from him some years ago. The purchase price of his company was $1,000,000. None of the publicly traded stock has been sold since Jack's death. The brokerage account is a transfer on death account and Jack's daughter, Jill, is the beneficiary. The balance of Jack's assets of $5,000,000 pass outright to Jack's wife, Hillie, under Jack's will, and Jack had not previously used any portion of his applicable exclusion amount. What is Jill's basis in the stock publicly traded stock? a. b. c. d. 23. $1,000,000. $2,000,000. $5,000,000. We do not have sufficient information to make that determination. Which of the following items is not includible in the gross estate of John, the decedent? a. Gift tax paid on a gift made by John two years before his death. b. The proceeds of life insurance on John's life where all incidents of ownership were transferred to an irrevocable trust 18 months prior to his death. c. The present value of a joint and survivorship annuity purchased by John's wife, Frieda. d. Property subject to John's testamentary general power of appointment. 24. The following statements about Qualified Terminable Interest Property (QTIP) trusts are true, except: a. A QTIP trust may not be implemented prior to the grantor s death. b. Only the grantor s spouse may be the income beneficiary, but may refuse to accept the bequest and elect against the will. c. The QTIP trust is a simple trust and anyone, including a charity, may be the remainderperson. d. If a trust otherwise qualifies, QTIP treatment may be elected for an undivided portion of the trust, such as 78 percent. 25. Which of the following statements is or are false? I. Louise, who died in 2012, was survived by her husband, Luis. Louise and Luis husband owned their home as tenants in common. The fair market value of the home on the date of Louise's death was $750,000. Louise provided all of the consideration for the purchase. The entire value of the property (on the date of Louise's death, or the alternate valuation date, whichever is applicable) is includible in Louise's gross estate for federal estate tax purposes. II. Two brothers, Jeff and David, purchased a vacation home in 1982, as joint tenants with right of survivorship. Jeff contributed $40,000 toward the purchase price and David contributed $60,000. They have records of their contributions. In 2012, when the property was worth $200,000, Jeff died. With respect to the vacation home, $100,000 is includible in Jeff's gross estate for federal estate tax purposes. III. By the terms of his will, John left his entire estate in trust. The terms of the trust provided that all trust income was to be paid to his wife (who survived him) for her life in at least annual installments. The terms of the trust also gave the trustee discretionary authority to distribute trust principal to his disabled daughter (who survived him) for her support. The trust meets the requirements of a qualified terminable interest property trust (QTIP Trust). a. b. c. d. e. 26. I only is false. II only is false. III only is false. I and II are false. I, II, and III are false. Which of the following statements is or are true? I. John and Mary owned a home as tenants by the entirety. The home was purchased in 1995 for $100,000. John contributed $70,000 toward the purchase price and Mary contributed $30,000. When John died in 2012, the home was worth $300,000. $210,000 will be included in John's gross estate for federal estate tax purposes as the value of his interest in the home. II. Mark transferred the title to his home to his son, Richard, on January 10, 2008, but Mark retained a life estate in the home. Mark released (that is, relinquished) his life estate in favor of his son, Richard, on July 4, 2009. Mark also established a new residence before he died. Mark died on May 3, 2012. The value of the home as of the date of Mark's death (or the alternate valuation date, if applicable) is not includible in Mark's gross estate for federal estate tax purposes. a. I only is true. b. II only is true. c. Both I and II are true. d. Neither I nor II is true. Facts for Questions 27 and 28. Lisa set up a revocable trust on June 20, 20012 to which she transferred all of her assets which were then worth $1,000,000. Question 27. Lisa died on June 21, 2015. At the date of her death in 2015, the trust assets were worth $1,500,000. The value of the assets of the trust are includible in her gross estate for Federal estate tax purposes. a. b. c. d. true. false. we do not have sufficient information to answer this question. only if Lisa's executor so elects. Question 28. a. b. c. d. 29. A completed gift was made in 2012 upon the transfer of the $1,000,000 of assets to the trust. true. false. we do not have sufficient information to answer this question. only if Lisa's executor so elects. Which of the following statements is or are true? I. If an asset is not subject to probate, then the only time it can be subject to federal estate tax if the property was jointly owned by the decedent with another with right of survivorship or owned by the decedent as tenants by the entirety with his or her spouse. II. Bob buys a whole life policy on his life with a face value of $100,000. He makes a gift of the policy to his son, Larry, on January 20, 2013, when the policy cash surrender value is $10,000. Larry becomes the policy owner and names himself the beneficiary. Bob retains no incidents of ownership. Bob dies on October 2, 2015. Life insurance proceeds are collected by Larry. The life insurance proceeds will be excluded from Bob's federal gross estate. III. Mitchell left his entire estate in trust for his son, Monroe. Monroe is to receive all trust income for life. Mitchell also gave Monroe the right to appoint, by the terms of Monroe's will, all trust assets remaining in trust at Monroe's death, to anyone Monroe wishes except to Monroe, Monroe's estate, Monroe's creditors, or the creditors of Monroe's estate. When Monroe dies, trust assets will not be included in his gross estate for federal estate tax purposes. a. I only is true. b. II only is true. c. Both I and II are true. d. III only is true. e. All are true. 30. Which, if any, of the following actions reduce both Ned's gross estate and probate estate? a. Ned purchased a CD listing title as \"Ned, payable on proof of death to Eileen.\" Eileen is Ned's niece. b. Four years ago, Ned named his wife as the designated beneficiary of his IRA. (Previously, Ned's estate was the designated beneficiary.) c. Five years ago, Ned made a gift of an insurance policy on his life to his daughter (the designated beneficiary). d. None of the above . 31. Bob died on January 30, 2015. His probate estate and his subchapter J estate include: a. b. c. d. 32. $1,200 salary due him from his employment. $100,000 life insurance policy payable to his widow. $75,000 IRA naming his widow as beneficiary. $10,000 in joint checking account with a surviving child. Which of the following statements is incorrect? a. The taxation of trusts and estates is governed by Subchapter J of the Internal Revenue Code. b. Form 1041 illustrates the semi-conduit theory of income taxation since all taxable income received by a trust or estate is taxed to the beneficiaries. c. The income tax rates applied to trusts and estates are highly compressed compared to income tax rates for individuals. d. When Shirley died, her estate included 200 shares of Stock in Corporation. On the date of her death the highest price the Stock traded for was $80 and the lowest price was $72. The estate tax date of death value for the Stock in Corporation is $15,200. 33. Which of the following statements is correct? a. b. c. Estates unlike trusts, are not required to pay estimated income taxes. Estates are not required to pay estimated income taxes on capital gain income. Estates are not required to pay estimated income taxes in their first two years. d. Estates are not required to pay estimated income taxes in their first two years if all income during the year consists of capital gain income and tax-exempt income