QUESTION 1

Penelope disclaimed a portion of her husband Hectors estate worth $300,000. The money passed to their son, Julio, who was named in Hectors will as the contingent beneficiary of his estate. Penelope made a taxable gift to Julio of $300,000 on the date she disclaimed the property

True

False

10 points

QUESTION 2

Which statement does not correctly describe a marital deduction?

The maximum amount allowable as a marital deduction is the net value of the property passing to a surviving spouse in a qualifying manner.

A marital deduction is not available for property that passes to the surviving spouses estate under a presumption-of-survivorship clause in the will when it cannot be determined which spouse died first.

A marital deduction taken in a decedents estate defers an estate tax on the property if it is included in the surviving spouses estate.

A marital deduction is available for property transferred to a surviving spouse when the couple is legally separated.

10 points

QUESTION 3

An estate tax marital deduction is available in all of the following situations, except:

The decedent spouses share of tenancy-in-common property is bequeathed to the surviving spouse through the will.

A husband received 60% of his wifes estate through intestacy therefore a marital deduction is available for 60% of the property transferred to the husband.

A husbands estate transferred $500,000 to his wife through a valid nuptial agreement.

A testamentary trust was created by will that gave the surviving spouse income for life with a limited power of appointment over trust corpus. No QTIP election was made.

10 points

QUESTION 4

The benefit of estate equalization is that a couples estate taxes can be lessened by paying some tax at the decedent spouses death because estate tax rates are progressive.

True

False

10 points

QUESTION 5

Which statement concerning a QTIP trust is incorrect?

Beneficiaries other than a surviving spouse may receive trust income or principal while the surviving spouse is alive

Trust assets are included in the surviving spouses estate although the spouse was given a terminable interest in the property.

The decedent spouses executor must elect QTIP treatment on the decedents IRS Form 706.

A surviving spouse can be given the power to appoint the greater of $5,000 or 5% of the trust corpus each year.

10 points

QUESTION 6

When a donor makes a charitable contribution during his lifetime there is an unlimited gift tax charitable deduction and an unlimited income tax charitable deduction in the year that the gift is made.

True

False

10 points

QUESTION 7

Jamie is actively involved with supporting his neighborhood community center. In 2012, Jamie contributed $11,000 of highly appreciated shares of stock and $20,000 cash to an Endowment Appeal, and spent about 200 hours of his time normally billed at $200/hour helping them to raise funds. If no further charitable contributions are made in 20012, what is the total value of Colbys charitable contributions for the year?

20,000

31,000

51,000

Cannot determine since we have no information on Colbys AGI.

10 points

QUESTION 8

Sam meets with Ed, a CFP professional to discuss his estate planning objectives. Sam wishes to give $500,000 to charity at his death. Which of the following should Ed suggest might be the best way to make this charitable gift at death?

Sam should include the bequest in his will, and his executor can decide which property is best suited to make this bequest.

Sam should name the charity as a beneficiary of his life insurance, so that they will be guaranteed to receive the $500,000 bequest.

Sam should name the charity as a beneficiary of his IRA. The assets will avoid probate, and, the charity will not pay income tax on the bequest.

Sam should name the charity as beneficiary of his bank account and mutual fund account by using TOD and POD designations.

10 points

QUESTION 9

The federal estate tax includes a portion which is given to the states.

True

False

10 points

QUESTION 10

Each state that imposes a state death tax does so based on the federal credit for state death tax paid.

True

False

10 points

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