acct424.quiz6 - 1 Question(TCO 9 What is the name given to...

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1. Question: (TCO 9) What is the name given to a tax levied on the right to pass property at death? Your Answer: Estate Tax. CORRECT ANSWER Instructor Explanation: An inheritance tax is a tax imposed on the right to receive property from a decedent at death. An estate tax is imposed on the decedent’s entire estate for the right to pass property at death. 2. Question: (TCO 9) Which, if any, of the following statements correctly reflects the rules applicable to the alternate valuation date (i.e., § 2032)? Your Answer: Its election affects the income tax basis of property included in the gross estate. CORRECT Instructor Explanation: The election is made by the executor of the estate (choice a.). No election can be made unless a Form 706 is due (choice b.), and the effect is to reduce both the gross estate and the estate tax liability (choice c.). The election (or nonelection) has a direct impact on income tax basis (choice d.). 3. Question: (TCO 9) Which, if any, of the following items is subject to indexation (adjusted to reflect inflation)? Your Answer: Instructor Explanation: No monetary amount is specified for making the § 2032 election (choice a.). True, the § 2032 election cannot be made unless a Form 706 must be filed, but this depends on the filing requirements and are not subject to indexation. Although the annual exclusion (choice c.) is not revised every year, it is adjusted whenever the inflation factor
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This note was uploaded on 04/22/2010 for the course ACCT ACCT424 taught by Professor Tracie during the Spring '10 term at DeVry Chicago O'Hare.

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acct424.quiz6 - 1 Question(TCO 9 What is the name given to...

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