$($There are $2$ correct answers$)$ A popular estate planning tactic to reduce or eliminate Federal Estate Tax for fairly weathly taxpayers which establish a testamentary trust to hold assets for the benefit of surviving spouse and moves assets to children after both parents are dead is called:

a$.)$ a credit shelter trust

b$.)$ a revocable trust

c$.)$ a gigolo $($bimbo$)$ protection trust

d$.)$ a lead trust

e$.)$ an inter vivos trust

shareholders can remove money tax free from a C corporation when:

a$.)$ never

b$.)$When there is no EP

c$.)$ When theres money in the checking account

d$.)$ Which the corporation declares a dividend

e$.)$ after making an s election

Gene and Audrey support their only child, Aaron, who is a junior in college. Audrey paid $540,000$ for tuition, room and board during $2023.$ Gene bought Aaron a new car costing $$30,000$ and paid for his spring break trip to Cancun for $54,000.$ Assume they never made taxable gifts in prior years and did not support anyone else in $2,023.$ Do Gene and Audrey have to file a gift tax return?

$$a$.)$ Yes, to split the gifks" but there will be no gift tax

$$b$.)$Yes$,$ and the gift tax will be $$1,700$

$$c$.)$ No

$$d$.)$ It depends on whether they expect to make gifs to Aaron in the future

If a partnership distributes depreciable assets to a partner

a$.)$The partner is taxed on the fair market value of the assets

b$.)$The partner is not taxed at all$$

c$.)$The partner pays ordinary income tax on the value of the assets in excess of his or her outside basis in the partnership$$

d$.)$The partner must report capital gains on the value of the assets in excess of his or her basis in the partnership.

If a partnership distributes cash to a partner$$

a$.)$The partner is taxed at a flat rate of $15\%$ on the amount of cash received$$

b$.)$The partner is not taxed at all$$

c$.)$The partner pays ordinary income tax on the amount of cash received which exceeds his or her outside basis in the partnership

d$.)$The partner must report capital gains on the amount of cash received which exceeds his or her outside basis in the partnership.

$($There are $2$ correct answers$)$ Prick and Frack each own $50\%$ of the stock in Bey Hall, Inc. an S corporation which began operations in $2016.$ Both paid $$50,000$ for their stock. Frick loaned the corporation $$25,000$ and both shareholders co$-$signed a bank loan for $$100,000.$ If the corporation reports a $$300,000$ loss this year, what losses can the shareholders deduet? They both work full time for the corporation and are at risk for all of their investment and for the loans to the corporation.

a$.)$ Both sharcholders can deduct $$100\mathrm{.}000,$

b$.)$ Frick can deduct $$50,000$

c$.)$ Frack can deduet $$100,000$

d$.)$ Frick can deduct $$125,000$

e$.)$ Prack can deduct $$50,000$

The concept of "double taxation" applies when.

$$

a$.)$A shareholder removes money from a C corporation as reasonable salary or$$documented expense reimbursements

b$.)$A shareholder is repaid for a properly documented loan the corporation owes to

the shareholder

c$.)$The IRS disallows certain C corporate expenses as "personal"

d$.)$A C corporation with no E & P pays money to a shareholder.$$

e$.)$All of the above

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