Sometimes also known as transaction taxes

2104. Question TF #1

Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes.

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a. True
b. False

2105. Question TF #2
A lifetime transfer that is supported by full and adequate consideration is not a gift.

a. True
b. False

2106. Question TF #3
One of the reasons the estate tax was enacted was to prevent the avoidance of the gift tax by the making of “deathbed gifts.”

a. True
b. False

2107. Question TF #4
At one point, the tax rates applicable to transfers by gift were lower than those applying to transfers by death.

a. True
b. False

2108. Question TF #5

Some states impose inheritance taxes, but the Federal tax system does not.

a. True
b. False

2109. Question TF #6
An estate tax is a tax on the right of an heir to receive property on the death of the owner.

a. True
b. False

2110. Question TF #7
A few states impose both an estate tax and an inheritance tax.

a. True
b. False

2111. Question TF #8
In some cases, the Federal gift tax can be imposed on someone other than the donor.

a. True
b. False

2112. Question TF #9
José, a citizen and resident of Panama, makes a gift of ExxonMobil stock to his children. Because ExxonMobil is a U.S. corporation, José will be subject to the U.S. Federal gift tax.

a. True
b. False

2113. Question TF #10
Kim, a resident and citizen of Korea, dies during an operation at the Mayo Clinic in Rochester (MN). Because Kim died in the U.S., he will be subject to the Federal estate tax.

a. True
b. False

2114. Question TF #11
Paul, a U.S. citizen, will avoid the Federal estate tax if he becomes a Canadian resident and owns no property located in the U.S. at the time of his death.

a. True
b. False

2115. Question TF #12
Becky made taxable gifts in 1974, 2010, and 2011. In computing the gift tax on the 2011 gift, she must consider all of the prior taxable gifts.

a. True
b. False

2116. Question TF #13
For Federal estate tax purposes, the gross estate may include property the decedent does not own.

a. True
b. False

2117. Question TF #14
For Federal estate tax purposes, the gross estate does not include property that will pass to a surviving spouse.

a. True
b. False

2118. Question TF #15
For both the Federal gift and estate tax, a deduction is allowed for certain transfers to charity.

a. True
b. False

2119. Question TF #16
In the past, the amount of the unified tax credit has been the same for both transfers by gift and transfers by death.

a. True
b. False

2120. Question TF #17
If the value of the gross estate is lower on the alternate valuation date than on the date of death, then the alternate valuation must be used.

a. True
b. False

2121. Question TF #18
For Federal estate and gift tax purposes, the exclusion amount is the same thing as the exemption equivalent.

a. True
b. False

2122. Question TF #19
Under the alternate valuation date election, each asset in the gross estate is valued at the lesser of the date of death value or six months thereafter.

a. True
b. False

2123. Question TF #20
Daniel’s will provides that all of his property passes to a trust, life estate to his wife, remainder to charity. If Daniel’s executor does not make a QTIP election, the use of the alternate valuation date is possible.

a. True
b. False

2124. Question TF #21
The election of the alternate valuation date cannot affect the amount of a charitable deduction allowed to an estate for a bequest to a qualified charity.

a. True
b. False

2125. Question TF #22
The election of the alternate valuation date does not include any income earned by the property after the date the deceased owner died.

a. True
b. False

2126. Question TF #23
A father wants to give a parcel of land to his two children. If he wants the survivor to have sole ownership, he should list ownership of the property as joint tenants.

a. True
b. False

2127. Question TF #24
The death of a tenant in common will defeat his or her interest in the property.

a. True
b. False

2128. Question TF #25
In community property states, all property acquired after marriage by either spouse is community property.

a. True
b. False

2129. Question TF #26
Sandy pays a local college for her non-dependent boyfriend’s tuition. The payment is not subject to the Federal gift tax.

a. True
b. False

2130. Question TF #27
Barry pays State University for his daughter’s room and board. Barry has made a transfer that is subject to the Federal gift tax.

a. True
b. False

2131. Question TF #28

Transfers to political organizations are not exempt from the application of the Federal gift tax.

a. True
b. False

2132. Question TF #29
Pauline sells antique furniture to her daughter, Nicole, for $10,000. If the furniture is really worth $100,000, Pauline has made a gift to Nicole of $100,000.

a. True
b. False

2133. Question TF #30
Mitch pays the surgeon and the hospital for his aunt’s gall bladder operation. The transfer is not subject to the gift tax.

a. True
b. False

2134. Question TF #31
Sam purchases a U.S. savings bond which he registers as follows: “Sam, payable to Don upon Sam’s death.” A gift occurs when Sam dies.

a. True
b. False

2135. Question TF #32
If interest is provided for in loans between related parties, there is no imputed interest, as a gift loan does not result.

a. True
b. False

2136. Question TF #33
For gift tax purposes, a property settlement in consideration of marriage (i.e., prenuptial agreement) is not treated the same as a property settlement incident to a divorce.

a. True
b. False

2137. Question TF #34

A timely issued disclaimer by an heir transfers the property to someone else without a Federal gift tax result.

a. True
b. False

2138. Question TF #35
Under his grandfather’s will, Tad is entitled to receive shares of Kroger Corporation. For Federal tax purposes, Tad is allowed to disclaim some of these shares and accept the others.

a. True
b. False

2139. Question TF #36
A transfer in trust in which the trustee has the power to accumulate income is not a gift of a future interest if the trustee never exercises the power.

a. True
b. False

2140. Question TF #37
In 2011, grandparents contribute jointly owned funds to a § 529 qualified tuition plan on behalf of their granddaughter. The maximum annual exclusion allowed to them is $130,000 ($26,000 ´ 5 years).

a. True
b. False

2141. Question TF #38
Although qualified tuition plans under § 529 are treated favorably for gift tax purposes, such plans are subject to estate tax consequences upon the grantor’s death.

a. True
b. False

2142. Question TF #39
To make the election to split gifts under § 2513, spouses must file a Form 709 (Federal gift tax return).

a. True
b. False

2143. Question TF #40
A husband and wife make a gift of their vacation home to their adult children. If the property is owned jointly by them, the gift-splitting election need not be made.

a. True
b. False

2144. Question TF #41
Under certain circumstances, the gift-splitting election can be made even though the electing spouses are no longer married to each other.

a. True
b. False

2145. Question TF #42
The use of the election to split gifts under § 2513 may be necessary for spouses who live in community property states.

a. True
b. False

2146. Question TF #43
If a donor has a fiscal year of July 1-June 30 for income tax purposes, this changes the normal filing date for Form 709.

a. True
b. False

2147. Question TF #44
A Federal gift tax return may have to be filed even if no gift tax is payable.

a. True
b. False

2148. Question TF #45
Iris dies intestate (i.e., without a will). All of her property passes to her heirs in accordance with the order of distribution prescribed under Federal law.

a. True
b. False

2149. Question TF #46
In most cases, the gross estate of a decedent is larger than the probate estate.

a. True
b. False

2150. Question TF #47
Interest on state and local bonds is subject to neither the Federal income tax nor the Federal estate tax.

a. True
b. False