ch25 Student: ___________________________________________________________________________ 1. The amount of the estate tax is directly related to the amount of taxable gifts. True False 2. The Federal transfer taxes are calculated using cumulative lifetime transfers. True False 3. An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax. True False 4. The exemption equivalent was repealed in 1976. True False 5. The unified credit is designed to allow a minimum amount of lifetime transfers without triggering the imposition of a transfer tax. True False 6. For 2011 the exemption equivalent for the estate tax is $5 million. True False 7. The marital and charitable deductions are common to both the estate tax and the gift tax formulas. True False 8. The estate tax is imposed on testamentary transfers. True False 9. The gift tax is imposed on intervivos (lifetime) transfers. True False 10. The tax rate schedule on taxable transfers has a maximum tax rate of 35% for 2011. True False 11. The probate estate consists of all property owned by the decedent that is excluded from the gross estate. True False 12. No deductions are allowed when calculating the taxable estate. True False 13. Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the gift tax and again under the estate tax. True False 14. The gross estate may contain property transfers that are not included in the probate estate. True False 15. The gross estate will not include the value of clothes and other personal items owned by the decedent at the time of death. True False 16. The gross estate will include the total value of all real property owned by the decedent at the time of death regardless of whether the decedent co-owned the property as tenants in common or as joint tenants with the right of survivorship. True False
17. Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate if the decedent had the right to designate the beneficiary of the policy. True False 18. The gross estate includes the value of half of real property owned by a decedent and spouse in joint tenancy with the right of survivorship. True False 19. The gross estate always includes the value of half of any real property owned by a decedent and another person in joint tenancy with the right of survivorship. True False 20. Proceeds of life insurance paid to the decedent's estate due to the death of the decedent are included in the decedent's gross estate even if the decedent had no ownership rights in the policy at the time of death. True False
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