American College HS330 Exam Practice Test Instant Access

Question 1

For estate tax purposes which of the following is (are) a form of charitable gifts that may qualify for the charitable deduction?

l. Split gifts

ll. Charitable remainder trusts

Al only

BII only

CBoth l and II

DNeither I nor II

Answer : C

Question 2

Which of the following statements concerning pooled-income funds is (are) correct?

l. A pooled income fund is similar to a mutual fund maintained by a qualified charity.

lI. If is an irrevocable arrangement in which the remainder interest passes to charity.

Al only

BII only

CBoth l and ll

DNeither l nor ll

Answer : C

Question 3

A man died in February of this year. Last year, when he learned that he had a terminal illness, he immediately made the following gifts and filed the required gift tax return:

Fair Market Value

Gift of listed stock to a

qualified charity $100,000

Gift of listed bonds to his wife 200,000

Gift of a boat to his son 10,000

Gift of a sports car to his daughter 10,000

What amount must be brought back to the man's estate as an adjusted taxable gift in the calculation of his federal estate taxes?

B$ 90,000

C$280,000

D$320,000

Answer : A

Question 4

A person dying without a will loses all the following rights EXCEPT the right to:

Aname the person to settle the estate

Bhave assets pass to heirs

Cgive property to a charity

Dtake maximum advantage of the marital deduction

Answer : B

Question 5

When the owner of a closely held business dies, the payment of a portion of the federal estate tax may be deferred for a period of several years if the estate otherwise qualifies under the provisions of IPC Section 6166. Which of the following statements concerning this deferral of federal estate tax is correct?

AThe interest rate on the deferred tax is determined by the prime rate in effect on the date of death.

BThe interest on the unpaid estate tax is payable over the first 10 years, after which the tax plus interest on the balance is payable in equal installments for the last 5 years.

CTo qualify for the tax deferral, the closely held business must represent more than 50 percent of the value of the decedent's adjusted gross estate.

DUnder certain circumstances, the estate will forfeit its right to tax deferral, and all the remaining unpaid estate tax will become due and payable immediately.

Answer : D

Question 6

Mr. Barlow died early this year. Under the terms of his will he left all his real estate and tangible personal property to his son. All the remainder of his probate estate was left to his wife, Mrs. Barlow. The following is a list of Mr. Barlow's probate assets and their fair market values at the time of his death:

Commercial real estate $150,000

Furniture and fixtures 75,000

Listed common stock 300,000

Other securities 200,000

In addition, Mr. Barlow also owned a $100,000 life insurance policy on his life with Mrs. Barlow designated as beneficiary. Based on this information, what is the amount of property in Mr. Barlow's estate qualifying for the federal estate tax marital deduction?

A$400,000

B$500,000

C$600,000

D$625,000

Answer : C

Question 7

All the following are grounds for contesting a will EXCEPT:

AThe instrument is a forgery.

BThe testator executed a later valid will.

CThe testator did not have testamentary capacity.

DThe widow was bequeathed less than her intestate share.

Answer : D

American College Fundamentals of Estate Planning test HS330 Exam Practice Test