American College HS330 Practice Exam, High Pass Rate American College HS330 Test Engine For DownloadAmerican College HS330 Practice Exam, High Pass Rate American College HS330 Test Engine For Download
Question: 31
Which of the following statements concerning revocable trusts is correct?
A – The transfer of properly to a revocable trust is typically motivated by non tax reasons.
B – A transfer of property to a revocable trust is treated as a completed gift.
C – A transfer of income-producing properly to a revocable trust will result in favorable income tax
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
treatment for the grantor. D – Property of a revocable trust will be included in the grantor’s probate property.
Answer: A
Question: 32
A man recently died with only probate assets. Under the terms of his will, he left his entire probate estate out right to his wife. The following are relevant facts concerning the estate:
Gross estate $2,400,000 Estate administration expenses 85,000 Debts of decedent 100,000 Allowable funeral expenses 10,000
The amount of the allowable marital deduction is
A – $2,205,000 B – $2,215,000 C – $2,305,000 D – $2,315,000
Answer: A
Question: 33
A wife makes outright gifts of $40,000 to her son this year, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?
A – Wife 0, husband $18,000 B – Wife $9,000, husband $9,000 C – Wife$19,000, husband$19,000 D – Wife $18,000, husband 0
Answer: B
Question: 34
A woman is the income beneficiary of an irrevocable trust. Which of the following powers given to her will cause all the assets in the trust to be includible in her gross estate for federal estate tax purposes?
A – The testamentary power to direct the trustee to use trust assets to pay her estate taxes B – The power to direct the trustee to pay trust assets to her limited in amount to an ascertainable standard relating to her health and education C – The power each year to direct the trustee to pay her an amount of trust assets not exceeding the greater of $5,000 or 5 percent of the assets held by the trust D – The testamentary special or limited power to direct the trustee to distribute trust assets to her children
Answer: A
Question: 35
A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets. Which of the following courses of action will best accomplish these objectives?
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
A – Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds B – Make her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself C – Make her a gift of enough corporate bonds from his port folio so that she will be able to support herself from the interest payments D – Purchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her
Answer: B
Question: 36
An individual who is a resident of State W is also the sole proprietor of a business located in State
W. He owns real property located in State X that is used by the proprietorship. While on vacation in State Y, the individual meets an untimely death. Under the terms of his will, his entire estate is bequeathed to a resident of State Z. Which state will tax the real property used by the proprietorship?
A – State W B – State X C – State Y D – State Z
Answer: B
Question: 37
Which of the following life insurance settlement options will qualify for the federal estate tax marital deduction?
l. Proceeds left to the surviving spouse under the interest option, with interest payable to the surviving spouse who has the unrestricted right to withdraw proceeds and with any proceeds not withdrawn payable equally to her children per stripes
ll. Proceeds left to the surviving spouse under an installment option, with any installments remaining at her death to be commuted and paid to her estate
A – l only B – II only C – Both l and ll D – Neither l nor ll
Answer: C
Question: 38
Which of the following statements concerning a power of appointment is (are) correct?
l. A power of appointment can be designed to restrict the donee’s right to appoint the property in favor of a specific class of recipients.
ll. A power of appointment can be designed to restrict the time period during which the donee may exercise the power.
A – l only B – II only C – Both l and II D – Neither I nor II
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
Answer: C
Question: 39
Which of the following statements concerning ante nuptial agreements is (are) correct?
l. They are frequently used to protect the interests of children of former marriages.
II. They can legally deprive a surviving spouse of his or her elective share of a deceased spouse’s estate.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: C
Question: 40
Which of the following statements concerning the joint tenancy with right of survivorship form of real property ownership is (are) correct?
l. The property is part of the probate estate of the first tenant to die.
ll. An owner can sell his interest in the property at any time without destroying the form of ownership.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: D
Question: 41
A number of states have passed statutes governing “living wills.” Which of the following statements concerning a living will is (are) correct?
l. A living will is an alternative to an inter vivos trust under certain circumstances.
ll. A living will is an oral will made by the testator during a final illness when it is impossible to write one.
A – l only B – II only C – Both l and ll D – Neither I nor Il
Answer: D
Question: 42
Which of the following actions on the part of a trustee is (are) a breach of his duties?
I. Placing substantial amounts of cash from the sale of securities in a no interest bearing checking account for a period of years
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
II. Investing all trust assets in securities that favor income beneficiaries to the detriment of remainder persons
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: C
Question: 43
Which of the following are ways of passing property from a deceased spouse to a surviving spouse so that the properly will qualify for the federal estate tax marital deduction?
I. When the surviving spouse receives the property by electing to take against the deceased spouse’s will
ll. When the surviving spouse receives the property as a consequence of the qualified disclaimer of another beneficiary
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: C
Question: 44
Which of the following statements concerning wills is (are) correct?
l. A will should be reviewed periodically to assure that the property owner’s most recent intentions are honored at death.
ll. Once signed, a will’s provisions may not be changed without the consent of all the beneficiaries under the will.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: A
Question: 45
Which of the following statements concerning the generation-skipping transfer tax (GSTT) is (are) correct?
I. An annual exclusion against GSTT will shelter gifts by a grandparent to a trust benefiting multiple grandchildren.
II. Tuition payments made directly by a grandparent to a university for a grandchild’s education
are exempt from GSTT.
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
A – l only B – II only C – Both land ll D – Neither I nor II
Answer: B
Question: 46
In which of the following situations will the grantor be taxed on income from trust property.
l. The grantor of a trust gives one of the trust beneficiaries the right to add or delete beneficiaries.
ll. An adverse party to the grantor holds the power to determine the timing to trust distributions to the beneficiaries.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: D
Question: 47
Which of the following statements concerning a grantor-retained annuity trust (GRAT) is (are) correct?
l. The grantor is taxed on trust income during the retained term.
II. The grantor makes an irrevocable transfer to the remainder person(s) when the trust is created.
A – I only B – II only C – Both I and lI D – Neither I nor II
Answer: C
Question: 48
Alan, a widower, is a retired executive with substantial assets. He wishes to provide for the financial security of his two grandchildren since their father, Alan’s son, has always managed money poorly. This year Alan would like each grandchild to receive a substantial gift. Which of the following statements concerning the generation-skipping transfer tax (GSTT) on these gifts is (are) correct?
I. Federal estate or gift tax will not be imposed if the gift is otherwise subject to the GSTT.
II. Assuming no prior gifts, Alan can gift a cumulative total of (not including the annual exclusion) $1.5 million to his grandchildren without the imposition of the GSTT.
A – l only B – II only C – Both l and ll D – Neither l nor ll
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
Answer: B
Question: 49
Which of the following statements concerning filing the federal estate tax return is (are) correct?
l. The estate tax return must be filed within 9 months of death unless an extension is granted by the IRS.
ll. For persons dying this year. an estate tax return must be filed for gross estates plus adjusted taxable gifts that exceed $1.5 million.
A – l only B – II only C – Both l and II D – Neither l nor ll
Answer: C
Question: 50
Which of the following statements concerning the gift or estate tax charitable deduction is (are) correct?
l. A donor is denied a charitable deduction for property that passes to a qualified charity as the result of a qualified disclaimer if the donor original transfer was to a no charitable donee.
ll. A decedent-spouse estate may obtain both marital and charitable deductions for interests contributed to a charitable remainder trust when the surviving spouse is the only no charitable income beneficiary for life.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: B
Question: 51
Which of the following statements concerning pooled-income funds are correct?
l. The fund contains commingled donations from many sources.
ll. A decedent donation purchases units in the fund which generate income that is paid at least annually to a charity.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: A
Question: 52
Which of the following factors is (are) used to make a choice between having an entity-purchase or cross-purchase partnership buy-sell agreement?
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
I. The cost basis of the partner’s business interests.
ll. The amount of the partner’s individual personal net worth’s
A – l only B – II only C – Both l and II D – Neither l nor lI
Answer: A
Question: 53
Which of the following transfers will be successful in removing property from a grantor’s gross estate?
l. A grantor’s transfer of property to a revocable trust if the grantor lives three years after the transfer.
ll. A grantor’s transfer of a personal residence to a qualified personal residence trust if the grantor survives the retained interest term.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: B
Question: 54
Which of the following statements concerning marital transfers to a non-U.S. citizen spouse is (are) correct?
l. A marital deduction is automatically available as long as property is transferred outright to the non-citizen spouse.
Il .A marital deduction is automatically available if the transferor-decedent spouse is a U. S. citizen.
A – l only B – II only C – Both l and ll D – Neither l nor ll
Answer: D
Question: 55
Which of the following statements concerning the inclusion in a decedent-employee’s gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee’s estate is (are) correct?
l. Lump-sum distributions of payments attributable to the employer’s contributions are excluded from the gross estate.
ll. Lump-sum distributions of payments attributable to the decedent-employee’s contributions are excluded from the gross estate.
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
A – l only B – II only C – Both l and II D – Neither I nor II
Answer: D
Question: 56
John plans to transfer his life insurance policy to an irrevocable trust for the benefit of his 19-year-old daughter, Jane. Which of the following conditions will enable the gift to qualify for the annual exclusion?
l. Jane is the irrevocable beneficiary of the life insurance trust but cannot withdraw from the trust until the death benefits are paid.
ll. Jane is given “Crummey” demand powers permitting the withdrawal at her discretion of the annual additions to the trust.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: B
Question: 57
Which of the following statements concerning the taxation of estates and trusts is (are) correct?
l. They are taxed similarly to partnership entities.
II. They are taxed on distributable net income (DNI) that is retained.
A – only B – II only C – Both l and lI D – Neither I nor II
Answer: B
Question: 58
Which of the following statements concerning pooled-income funds is (are) correct?
l. A pooled income fund is similar to a mutual fund maintained by a qualified charity.
ll. lt is an irrevocable arrangement in which the remainder interest passes to charity.
A – l only B – II only C – Both l and ll D – Neither l nor ll
Answer: C Question: 59
Exam Name: Fundamentals of Estate Planning test
Exam Type: American College
Exam Code: HS330 Total Questions: 400
Which of the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship is (are) correct?
I. Either real or personal property may be owned as a joint tenancy with right of survivorship.
Il. Nonqualified joint tenants with right of survivorship may have unequal separate shares of the property.
A – l only B – II only C – Both I and ll D – Neither I nor II
Answer: A
Question: 60
Which of the following statements concerning the methods of valuing a closely held business for federal estate tax purposes is (are) correct?
l. The capitalization-of-adjusted-earnings method uses a capitalization rate that varies inversely with the degree of risk and rate of return.
II. The adjusted-book value method involves adjusting the asset components of a business to an approximate fair market value for each component.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: C
Question: 61
Which of the following statements concerning guardians is (are) correct?
l. A guardian is appointed by a court.
Il. A guardian holds equitable title to the property he administers for his or her ward.
A – l only B – II only C – Both l and ll D – Neither I nor II
Answer: A
Question: 62
Which of the following types of partial interests in property may be allowed a charitable deduction for estate tax purposes?
l. A remainder interest in the donor vacation home
ll. A testamentary gift of a percentage of a decedent entire interest in property held in trust
American College HS330 Practice Exam, High Pass Rate American College HS330 Test Engine For Download