Estate planning 410 Please answer as many as possible All multiple choice THANK YOU IN ADVANCE Which of the following historical events has had the greatest effect on estate planning in the United States today? (A) the development by Romans of the system of forced heirship (B ) the enactment of the Code of Hammurabi (C) the passage of intestate distribution statutes in all states (D) the enactment of federal laws imposing taxation on the gratuitous transfer of property 2.) A wife makes outright gifts of $96,000 to her son, and her husband agrees to split gifts with her. Which of the following correctly states the amount of taxable gifts? (A)Wife$27,000, husband$47,000 (B)Wife$37,000, husband$37,000 (C)Wife$47,000, husband$47,000 (D)Wife$74,000, husband$0 3.)The federal estate tax is (A)A tax on the right of a decedent to transfer property (B)The tax on the right of a beneficiary to inherit property (C)A tax levied only on a decedent's probate property (D)An excise tax levied on the privilege of accumulating wealth 4.)The owner of a successful business wishes to retires and sell the business to her daughter. The business is worth substantially more than the owner's basis. The owner and her daughter agreed to an installment sale. Which of the following statements concerning this sale is correct? (A)The sale price should be lower than the fair market value of the business to avoid estate or gift tax complications (B)The installment period must be limited to 10 years or less to avoid adverse estate tax consequences (C)The principal payments payable after the seller's death avoid estate inclusion (D)The interest rate specified should be reasonable to avoid adverse gift or income tax consequences 5.) Which of the following statements concerning guardians is correct? (A)A guardian for personal care is called a guardian ad litem. (B)A special guardian can be appointed by the court to protect a minor's rights in a legal proceeding . (C)A guardian named in a deceased parent's will is binding on the court. (D) A guardian receives the legal authority to act from the deceased parent's will. 6.) A widower made the following cash gifts in the current year: Donee Amount of Gift His daughter $15,000 A qualified charity $20,000 His sister $5,000 His brother $10,000 His mother $25,000 The total amount of the taxable gifts made was (A) 18,000 (B) $28,000 (C)$38,000 (D)$75,000 7.) Which of the following statements concerning a fiduciary relationship is correct? (A) A guardian of minor is responsible for the ward personally and for the ward's property . (B) An executor named in the will has a fiduciary relationship with the beneficiaries. (C) A trustee is generally given authority to act by the courts . (D) A trustee may ignore the trust terms since his or her loyalty is to the beneficiaries. 8.) The following are facts concerning a decedent's estate: Taxable estate $900,000 Pre-1977 taxable gifts $100,000 Post- 1976 adjusted taxable gifts $150,000 Post -1976 gifts made to a qualified charity $300,00 9.) Jenkins, a widower, made the following gifts last year: -$50,000 in cash to his son - $15,000 in cash to the American Cancer Society -Stock worth $20,000 to his grandson (the stock was originally purchased for $ 10,000 ) -Bonds worth $90,000 to the University of Pennsylvania development fund (the bonds were originally purchased for $100,000) What is the total amount of taxable gifts made by John? (A) $39,000 (B) $48,000 (C)$131,000 (D) $163,000 10.) A father and son have been farming land owned by the father for the past 12 years. Just prior to his death the father was offered $1 million for his farm because of its possible use as a shopping center. The son would like to continue to farm the land if it can be included in his father's estate its current-use value. Additional facts are as follows: -Average annual gross rentals from nearby farms of similar acreage are $60,000 -Average annual state and local real estate taxes on the farm are $12,000. -The interest rate for loans from the Federal Land Bank is 8 percent For federal estate tax purposes, the farm-method valuation formula would result in a current-use value for the farm of (A) $400,000 (B)$600,000 (C) $ 750,000 (D) $850,000 11.) The following are facts concerning a decedent's estate Gross estate $1,800,000 Funeral and administrative expenses $75,000 Marital deduction $400,000 Post-1976 adjusted taxable gifts $50,000 State death tax $48,000 The tentative tax base for this estate is ( A) $1,227,000 (B) $1,275,000 (C) $1,325,000 (D) $1,375,000 12.) A decedent died on January 1 of this year. The facts concerning the decedent estate are as follows: Estate tax payable before credits $465,000 Funeral and administrative expenses $75,000 Applicable credit amount (2003) $345,800 State death taxes paid $15,900 State death tax credit (2003) $4,400 Based on the above information, the net federal estate tax payable is (A) $0 (B )$114,800 (C)$299,100 ( D)$374,100 13.) Which of the following statements concerning state death taxes is (are) correct? Its primary purpose is to minimize taxes Its final implementation is usually accomplished by an attorney (A)I only (B)II only (C)Both I and II (D)Neither I nor II 14.) Which of the following statements concerning estate planning is (are) correct? Its primary purpose is to minimize taxes Its final implementation is usually accomplished by an attorney (A)I only (B)II only (C)Both I and II (D)Neither I nor II 15.) Which of the following activities is (are) a part of the estate planning process? Reviewing existing plans Interviewing clients (A)I only (B)II only (C)Both I and II (D)Neither I nor