Appreciated property that was inherited in 2016 a will have a stepped up basis

Appreciated property that was inherited in 2016 a

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42.Appreciated property that was inherited in 2016a. will have a stepped-up basis.b. avoids income tax on the appreciation prior to the date of death.c. avoids income tax on any post inheritance appreciation on a future sale.d. (a) and (b) only.ANSWERdLO 12.4DIFFICULTY: Moderate43. The following gifts could be subject to the generation skipping transfer tax except:DIFFICULTY: Easy44. Morrow died on January 15, 2016 leaving the following assets:AssetsDate of DeathFair Market ValueAlternate ValuationDate ValueHome$600,000$610,000Stocks$300,000$270,000Bonds$400,000$402,000Rolls Royce$75,000$78,000What is the value of the estate if the alternative valuation date is elected and the house was sold on March 10 for $605,000 and the stocks were sold on June 30 for $265,000?LO 12.4DIFFICULTY: Moderate45.Both gross annual gifts and the gross estate are reduced for
Chapter 12: Wealth Transfer Taxes 21ANSWERdLO 12.2 & 12.4DIFFICULTY: Moderate46. The alternate valuation date for an estate a. is elected by beneficiariesb. should be elected if the size of the estate increases to receive higher basesc. values the estate six months after the date of deathd. does not require the filing of an estate tax return to make the election ANSWER LO 12.4cDIFFICULTY: Easy47.Which of the following is not an advantage of lifetime gifts?DIFFICULTY: Easy48. Which of the following is an advantage to making a lifetime transfer of property to a donee?bDIFFICULTY: Easy49.When comparing lifetime transfers to testamentary transfers, which of the following would be preferable as a testamentary transfer?b
22Taxation for Decision Makers Test Bank

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