FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 25: Transfer Taxes and Wealth Planning of the Cfa Institute

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

The gift tax is imposed on inter vivos (lifetime) transfers.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Jayden gave Olivia a ring when she agreed to marry him. The ring is a family heirloom valued at $67,000. What is the amount of the taxable gift?

A) zero - the marital deduction offsets the gift as long as Jayden and Olivia are married by year end.
B) $53,000
C) $67,000
D) zero - this transfer is not gratuitous.
E) None of these.

F) B) and C)
G) A) and E)

Correct Answer

verified

Show Answer

Question 23

Essay

Review LaterAdd Note

Last year Diego transferred a life insurance policy worth $75,000 to an irrevocable trust with directions to distribute the corpus of the trust to his grandson, Juan, upon his graduation from college, or to Juan's estate upon his death. Diego paid $5,000 of gift tax on the transfer of the policy. Early this year, Diego died and the insurance company paid $600,000 to the trust. What amount, if any, is included in Diego's gross estate?

A future interest is a right to receive income or property in the future.

Gabriel had a taxable estate of $6 million when he died in 2014. Calculate the amount of estate tax due (if any) if Gabriel made prior taxable gifts in 2005 totaling $1 million at which time he claimed a unified credit of $1 million and paid no tax. Gabriel was unmarried at his death.

A serial gift strategy consists of arranging a trust to maximize the value of the unified credit.

The unified credit is designed to:

A serial gift strategy uses multiple gifts to maximize the value of the annual exclusion.

A gratuitous transfer of cash to an individual who uses the cash to pay medical expenses is not subject to a gift tax.

Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters. The three daughters share income equally for five years and then the corpus of the trust is to be divided equally between them. What is the amount of the taxable gifts, if any, made by Christian?

The marital and charitable deductions are common to both the estate tax and the gift tax formulas.

This year Carlos and Hailey purchased realty for $480,000 and took title as equal tenants in common. However, Hailey was able to provide only $200,000 of the purchase price and Carlos paid the remaining $280,000. Has Carlos made a taxable gift to Hailey, and if so, in what amount?

The amount of the estate tax is directly related to the amount of taxable gifts.

The generation-skipping tax is designed to accomplish which of the following?

Sophia is single and owns the following property: $\begin{array}{lr}{\text { Description }} & {\text { Value }} \\\text { Real estate property } & \$ 4,500,000 \\\text { Cash, stock, and bonds } & 2,800,000 \\\text { Personal property } & 300,000\end{array}$ Sophia owns the real property in joint tenancy with Daniel. They purchased the property several years ago for $1 million. Sophia was only able to provide $200,000 of the purchase price. If Sophia dies, what is the amount of her gross estate?

The Federal transfer taxes are calculated using cumulative lifetime transfers.

Grace transferred $800,000 into trust with the income to be paid annually to her spouse, Isaiah, for life and the remainder to Taylor. Calculate the amount of the taxable gifts from the transfers.

Chloe's gross estate consists of the following property valued at the date of death: Description $\quad\quad\quad\quad\quad\quad\quad$ Value Real estate $\quad\quad\quad\quad\quad\quad\quad \$ 5,500,000$ Cash, stock, and bonds $\quad\quad\quad1,700,000$ Personal property $\quad\quad\quad\quad\quad 300,000$ Chloe's real estate is encumbered by a mortgage of $450,000, and Chloe's executor paid her funeral costs of $6,000 and charged fees for $24,000. Which of the following is a true statement?

Madison was married at the time of her death and her gross estate consisted of $22 million in stock and bonds. Madison left all of her property to her spouse. What is the result?

Only complete gifts are subject to the Federal gift tax.