HS330 Online Practice Questions and Answers

Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?

1.

Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.

2.

Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.

A. 1 only

B. Both 1 and 2

C. Neither 1 nor 2

D. 2 only

Which of the following types of real property ownership will be deemed to be a tenancy in common?

A. Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.

B. Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.

C. Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.

D. Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himself of his interest by sale, gift, or will.

Which of the following statements concerning the generation-skipping transfer tax (GSTT) is correct?

A. The GSTT rate applicable to a transfer depends upon the amount of the gift.

B. The lifetime exemption shelters a maximum of $1 million of transfers to grandchildren from GSTT for the current year.

C. Tuition payments made by a grandparent directly to a university for a grandchild's education are exempt from GSTT.

D. The annual exclusion against GSTT shelters gifts by a grandparent to a trust benefitting multiple grandchildren.

Which of the following provisions is (are) generally common to all buy-sell agreements?

1.

Provisions specifying how the purchase price is to be funded.

2.

Statement indicating the purpose of the agreement.

A. 2 only

B. Neither 1 nor 2

C. 1 only

D. Both 1 and 2

An individual who is a resident of State W is also the sole proprietor of a business located in State

A. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z. Which state will tax the real property used by the proprietorship?

B. State X

C. State W

D. State Z

E. State Y

All the following statements concerning a complex trust are correct EXCEPT:

A. Beneficiaries must receive all distributable net income in the year received by the trust.

B. The trustee may make distributions of principal to trust beneficiaries.

C. A complex trust may make gifts to charity.

D. Beneficiaries are taxed on their share of distributable net income when received by them.

Which of the following statements concerning filing the federal estate tax return is correct?

A. A one-year extension for filing the estate tax return is granted when the estate contains a closely held business interest.

B. An automatic two-year extension for filing the estate tax return is granted when the decedent dies overseas.

C. The estate tax return must be filed within 9 months of death unless an extension is granted by the IRS.

D. For persons dying under current law, an estate tax return must be filed for all U.S. citizen decedents.

Requirements for property to qualify for the federal estate tax marital deduction include which of the following?

1.

The property interest must be includible in the decedent's gross estate.

2.

The property must pass in such manner that it will be includible in the surviving spouse's estate at death unless consumed or given away.

A. 1 only

B. Both 1 and 2

C. Neither 1 nor 2

D. 2 only

Which of the following statements concerning certain types of property interests is (are) correct?

1.

The person or entity who has title to the property is the legal owner of the property.

2.

The person who has the right to all income earned on the property is the beneficial or equitable owner of the property.

A. Neither 1 nor 2

B. 1 only

C. 2 only

D. Both 1 and 2

Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?

A. It is a form of property ownership available only to married persons.

B. It is a form of property ownership that applies only to personal property.

C. One tenant can freely transfer his or her property interest to a third person.

D. The property will be in the probate estate of the first joint tenant to die.