American College HS330 Quiz 2 Topic 1 Questions 6-10

Question: 1

Which of the following statements concerning the estate tax marital deduction is correct?

AThe marital deduction available to a decedent in a common-law state is equal to one half the adjusted gross estate.

BThe marital deduction available to a decedent in a community-property state is equal to the total amount of community property.

CThe marital deduction available to a decedent in a common-law state is equal to the net amount of qualifying property passing to the surviving spouse.

DThe marital deduction available to a decedent in a common-law state is limited to a maximum of $1 million.

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Question: 2

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.

II .An adverse party to the grantor holds the power to determine the timing of trust distributions to the beneficiaries.

Al only

BII only

CBoth l and ll

DNeither I nor II

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Question: 3

Which of the following factors is (are) used to make a choice between having an entity-purchase or a cross-purchase partnership buy-sell agreement?

l. The number of partners

ll. The divergence of the partners' business knowledge and skills

Al only

BII only

CBoth l and ll

DNeither l nor ll

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Question: 4

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.

II .An adverse party to the grantor holds the power to determine the timing of trust distributions to the beneficiaries.

Al only

BII only

CBoth l and ll

DNeither I nor II

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Question: 5

Which of the following statements concerning the generation-skipping transfer tax (GSTT) is correct?

AThe GSTT rate applicable to a transfer depends upon the amount of the gift.

BThe annual exclusion against GSTT shelters gifts by a grandparent to a trust benefiting multiple grandchildren.

CThe lifetime exemption shelters a maximum of $1 million of transfers to grandchildren from GSTT for the current year.

DTuition payments made by a grandparent directly to a university for a grandchild's education are exempt from GSTT.

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American College HS330 Quiz:2 Topic:1 Questions:6-10