1. d) Escheat
2. d) A fee simple estate
3. c) Wife - $46,000, husband - $46,000
Answer: C
Since there is an agreement to split the gift equally between the spouses, then each is treated as contributing a gift of $48,000. Because the husband and wife are eligible for exclusion, then each will have an equal amount of $48,000- $2,000= $46,000
4. a) Foreign death taxes
c) Claims against the estate
To compute Adjusted Gross Estate, we take the value of the gross estate and from it we less all the expenses (deductions) associated with that estate. In this case, only marital, state death and charitable deductions are not considered as deductions against the gross estate.
5. b) The income is taxable to the person or entity receiving it.
c) IRD includes income earned by the executor on estate assets.
Answer: B and C
As per the IRS regulations, IRD is the inherited income and is subject to federal income tax. It is the income that was earned by the decedent during their lifetimes, but no tax was piad on the funds by the time of demise. As such, the income must be subjected to taxation as income for the recipient (beneficiary).
6. a) A tax on the right of a decedent to transfer property
Answer: C
Estate tax is a tax on a person’s right to transfer property at or upon his or her death
7. b) The installment period must be limited to 10 years or less to avoid adverse estate tax
consequences.
d) The interest rate specified should be reasonable to avoid adverse gift or income tax
consequences.
Answer: B and D
8. b) A special guardian can be appointed by the court to protect a minor’s rights in a legal
proceeding.
Answer: B
For a person to assume the roles of a legal guardian and act as such (even in cases of the parents death), the court must issue him or her the letters of guardianship, which will given him/her the legal authority to act.
9. b) A life estate in property
c) A life interest in a trust over which the surviving spouse has special power of appointment
Answer: B and C
10. d) The property interest must be includible in the surviving spouse’s estate at death unless
consumed or given away.
11. c) Property passing outside the probate estate is not subject to federal estate tax.
d) For all estates required to file a return, a federal estate tax return must be filed within 9
months of death unless an extension is granted.
Answer: C and D
12. a) the testamentary power to direct the trustee to use trust assets to pay her estate taxes.
Answer:A

In 1-2 paragraphs, Briefly explain one topic or issue from this wee...