Taxation-multiple+choices[1] - Taxation Trusts Estates and...

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Taxation Trusts, Estates, and Professional Standards Compare and contrast gift, estate, and generation-skipping transfer taxes with income tax Explain the use of trusts in estate tax planning Explain the administrative procedures of the IRS and preparer standards Week 6 Quiz ACC/547 (Taxation) 1. In the current year, Cesar, who is single, gives $26,000 to each of his 20 nieces and nephews for a total property transfer of $520,000. Cesar's taxable gifts total a. $520,000. b. $240,000. c. $300,000. d. $280,000. 2. Barbara sells a house with a FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of a. $50,000. b. $170,000. c. $120,000. d. $0. 3. In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total a. $70,000. b. $59,000. c. $58,000. d. $25,000. 4. Identify which of the following statements is true. a. A taxable gift may occur when property is sold for less than its FMV in the normal course of business. b. An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value. c. The statutory exemption from the gift tax for payments for medical care requires that the payment be made for a relative.
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d. All are false. 5. Greg transfers property on August 8 of the current year with an adjusted basis of $40,000 and a FMV of $90,000 to his ex-wife as a property settlement that is part of their divorce agreement. The property settlement agreement and the divorce were both finalized on June 3 of the current year. Greg has made a gift of a. $0. b. $40,000. c. $80,000. d. $90,000. 6. Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year? a. Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. b. Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. c. Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year.
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This note was uploaded on 09/18/2009 for the course BUSINESS ACC 547 taught by Professor Micheal during the Summer '09 term at University of Phoenix.

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Taxation-multiple+choices[1] - Taxation Trusts Estates and...

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