Pass HS-330 Exam to Get American College Certification

Category:

Comments:

0 Comments

Post Date:

February 12, 2024

The HS-330 exam is hot, and passing it requires a deep understanding of American College solutions. Practicing with American College HS-330 dumps questions can help you reinforce your knowledge and increase your chances of passing the exam. HS-330 dumps are available to help you prepare for the HS-330 exam. Using HS-330 exam dumps questions is one effective way to supplement your study plan and increase your chances of success on exam day. Test free American College Certification HS-330 exam dumps below.

Page 1 of 12

1. The following are facts concerning a decedent’s estate:

Taxable estate $1.700, 000

Pre-1977 taxable gifts 200, 000

Post-1976 adjusted taxable gifts 50, 000

Post-1976 gifts made to a qualified charity 100, 000

The tentative tax base of this estate is

$1,700,000

$1,750,000

$1,850,000

$1,900,000

2. All the following are steps in calculating a decedent’s maximum estate tax marital deduction EXCEPT:

Compute the decedent’s gross estate.

Subtract the allowable expenses and debts to determine the adjusted gross estate.

Determine the net amount of property in the gross estate that passes to the surviving spouse in a manner qualifying for the marital deduction.

Subtract the applicable exclusion amount available in the year of the decedent’s death.

3. Ignoring the annual per-donee exclusion, all the following transfers are gifts for federal gift tax purposes EXCEPT:

A creditor cancels the promissory note of a friend who recently became unemployed.

A grandmother reimburses her grandson for his college tuition costs.

A father lends his daughter a large sum of money interest free for a period of 2 years.

An individual gratuitously performs valuable services for the benefit of a close friend.

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

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

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

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

Tuition payments made by a grandparent directly to a university for a grandchild’s education are exempt from GST

5. A mother died leaving her property equally to her wealthy daughter and her poor son. The daughter wishes to disclaim her share of the inheritance so that it will pass to her brother without her incurring any gift tax liability. Assume that the disclaimer is written, is timely, and is irrevocable.

Which of the following statements concerning an additional requirement of a qualified disclaimer is (are) correct?

l. The daughter refusal must direct specifically that her brother is to receive her inheritances

II. The daughter must not have received any part of her inheritance or any income from it prior to her refusal to accept it.

l only

II only

Both l and lI

Neither I nor II

6. 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?

The testamentary power to direct the trustee to use trust assets to pay her estate taxes

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

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

The testamentary special or limited power to direct the trustee to distribute trust assets to her children

7. Which of the following transactions is a taxable gift for federal gift tax purposes?

A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.

A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.

A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.

A grandmother purchased a

savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.

8. Which of the following members of the estate planning team is responsible for assuring that the clients intentions are expressed in documents that will carry out the final plan?

The life underwriter

The trust officer

The lawyer

The investment counselor

9. All the following statements concerning guardians for minors are correct EXCEPT:

A guardian named in a deceased parents will is not necessarily binding on the court.

A guardian has equitable title to the property he administers for the minor.

A special guardian can be appointed by the court to protect a minor’s rights in a legal proceeding.

A guardian of the person of a minor may not necessarily be the guardian of the minor’s property.

10. Which of the following acts by a person other than a lawyer is (are) clearly an unauthorized practice of law?

l. A trust officer gives a client advice about the taxation of a trust.

ll. A CPA designs an estate plan for presentation to a client.

l only

II only

Both l and ll

Neither I nor II

Page 2 of 12

11. Which of the following statements concerning charitable remainder annuity trusts is correct?

It provides a fixed annuity income interest to a qualified charity.

The donor receives an estate tax charitable deduction for the value of the remainder interest.

The term of charitable remainder annuity arrangements is limited to 10 years.

The interest paid to the charity must be paid at least quarterly.

12. A person dying without a will loses all the following rights EXCEPT the right to:

name the person to settle the estate

have assets pass to heirs

give properly to a charity

take maximum advantage of the marital deduction

13. All the following statements concerning a power of appointment are correct EXCEPT:

The appointee of a power of appointment is the party who exercises the power.

The donee of a power of appointment might be restricted with respect to the time the power can be exercised.

Failure to exercise a power of appointment is known as a lapse of the power.

The possible recipients of property alter the exercise of a power of appointment depend on the terms of the power.

14. To determine whether a taxable gift has been made, the IRS focuses on all the following factors

EXCEPT:

Was the transferred property real property or personal property?

Was the value of the gift property in excess of the annual per-donee exclusion?

Did the donor absolutely, irrevocably, and currently divest himseIf of dominion and control? over the property?

Was the property transferred for less than an adequate and full consideration in money or money’s worth?

15. Which of the following types of real properly ownership will be deemed to be a tenancy in common?

Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.

Two brothers own equal undivided interests in a piece of real properly, with each brother being able to divest himseIf of his interest by sale, gift, or will.

Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.

Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.

16. Many trust instruments provide for the removal of the original trustee. All the following are valid reasons for removal of a trustee EXCEPT:

A shift in trust situs is desirable because of changes in law.

The beneficiary has been successful with investments and wants to manage the trust assets.

The beneficiary is not able to get along with the present corporate trustee.

The beneficiary has moved his or her residence to a distant state.

17. 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

l only

II only

Both l and ll

Neither l nor ll

18. A married man died this year leaving a gross estate of $2,700,000.

Some additional facts concerning his estate are:

Administration expenses and debts $300,000

Marital deduction 800,000

Applicable credit amount (2005) 555800

Applicable exclusion amount (2005) 1,500,000

State death taxes payable 17,700

Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over $1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000 the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal tax payable is

$37,035

$42,865

$47,065

19. All the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship are correct EXCEPT:

All joint tenants must have equal interests in the property.

Joint tenants need not be related either by blood or marriage.

Either real property or personal property may be the subject of this type of ownership.

Upon the death of a joint tenant, his interest in the property passes to his estate or heirs.

20. The interest rate for loans from the Federal Land Bank is 8 percent. For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

$300,000

$400,000

$500,000

$600,000

Page 3 of 12

21. All the following statements concerning a power of appointment are correct EXCEPT:

The appointee of a power of appointment is the party who exercises the power.

The donee of a power of appointment might be restricted with respect to the time the power can be exercised.

Failure to exercise a power of appointment is known as a lapse of the power.

The possible recipients of property after the exercise of a power of appointment depend on the terms of the power.

22. The federal gift tax is

levied directly on the gift

a tax on the right of the do flee to receive the property

a flat tax based on gifts made in any taxable year

a tax on the right of the donor to make the gift

23. Believing that his death was imminent, a widower gave his son some real estate two years ago, and

filed a timely gift tax return. The widower died on January 1st of this year.

Additional facts are:

Widower’s basis in the real estate $200,000

Value of real estate when gifted 510,000

Value of real estate on date of death 1,00000

Amount of gift tax paid by widower 159,500

Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:

The gift of the real estate is included in the calculation of the widower’s federal estate tax as an adjusted taxable gift.

The gift tax paid is brought back into the widower’s gross estate at $159,500.

The widower recognized no capital gain for income tax purposes at the time the gift was made.

The son’s income tax basis in the real estate is $1,000,000.

24. Which of the following is an example of a taxable gift for federal gift tax purposes?

A father gives his 19-year-old daughter a note promising to give her his Rolls Royce when she reaches the age or 21.

Instead of parents paying an outside executive $60,000, a son runs their business for 8 months without charging a fee.

The parents of a married son permit their son and his family to use a summer cottage that rents for$3,000 per month on a rent-free basis.

A rather cancels a $50,000 note his daughter gave him when he made a loan to her 2 years ago.

25. Which of the following statements concerning executors is correct?

The executor named in the will of a deceased person is automatically authorized to act.

All executors must post bonds.

The executor must be a licensed attorney in the decedent’s state of domicile.

An executor can be given broad and discretionary powers with respect to the management of the estate.

26. All the following statements concerning guardians for minors are correct EXCEPT:

A guardian named in a deceased parent’s will is not necessarily binding on the court.

A guardian has equitable title to the property he administers for the minor.

A special guardian can be appointed by the court to protect a minor’s rights in a legal proceeding.

A guardian of the person of a minor may not necessarily be the guardian of the minor’s property.

27. Among the assets in a decedent’s gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses.

The relevant facts concerning this estate are:

Adjusted gross estate $1,600,000

Fair market value of stock in the

closely held corporation 700,000

Funeral expenses 30,000

Executor’s commission 50,000

Federal and state death tax 160,000

What amount of closely held corporate stock can be redeemed under IRC Section 303 so that the redemption will be treated as a sale or exchange rather than a dividend distribution?

B. $60,000

C. $240,000

D. $700,000

28. An executor elects to value the assets of the estate at the alternative valuation date 6 months after death.

Which of the following statements concerning the estate tax value of assets included in this estate is correct?

An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.

Property sold before the alternate valuation date is valued at the alternate valuation date.

Property that has increased in value since the date of death may be valued at the date of death if the executor so elects.

Property distributed under the will before the alternate valuation date is valued at the date of death.

29. A wife with substantial property in her own name would like to provide for her husband in the event of her prior death but does not want him to be able to leave her property to a second wife if he remarries. She would also like to take advantage of the marital deduction to save federal estate taxes. Her attorney has advised her that qualified terminable interest property (QTIP) will accomplish her objectives. To qualify such property for the marital deduction, all the following requirements must be met EXCEPT:

The surviving spouse must be given a life time right to receive all the property’s income at least annually.

An irrevocable election must be made by the decedent’s executor to have the property includible in the surviving spouse’s gross estate.

The property must have been included in the decedents gross estate for federal estate tax purposes.

The surviving spouse must be given a general power to appoint each year at least $5,000 or 5 percent of the value of the property.

30. An executor elects to value the assets of the estate at the alternative valuation date 6 months after death.

Which of the following statements concerning the estate tax value of assets included in this estate is correct?

An annuity included in the gross estate that diminishes with the mere passage of time is includible at the date of death value.

Property sold before the alternate valuation date is valued at the alternate valuation date.

Property that has increased in value since the date of death may be valued at the date of death if the executor so elects.

Property distributed under the will before the alternate valuation date is valued at the date of death.

Page 4 of 12

31. All the following will be brought back into the donor’s gross estate for federal estate tax purposes EXCEPT:

a gratuitous transfer of real property with a reserved right to use and enjoy it for life

a gratuitous transfer of real property to a revocable inter vivos trust

an outright, gratuitous transfer of real property in contemplation of death

the gift taxes paid last year on a gratuitous transfer of real property

32. All the following will be brought back into the donor’s gross estate for federal estate tax purposes EXCEPT:

a gratuitous transfer of real property with a reserved right to use and enjoy it for life

a gratuitous transfer of real property to a revocable inter vivos trust

an outright, gratuitous transfer of real property in contemplation of death

the gift taxes paid last year on a gratuitous transfer of real property

33. All the following statements concerning life time gifts are correct EXCEPT:

The amount of gift tax paid within 3 years of death is included in the gross estate.

A substantial amount of property may be given away over a period of time without the imposition of the federal gift tax because of the annual exclusion.

Gifts of life insurance within 3 years of death are included in the donor-insured’s gross estate.

If a wealthy widower lives more than 3 years after making a taxable gift to his sister, the value of the gift has no effect on his federal estate tax liability.

34. A man established and funded an irrevocable trust and named a bank as trustee. All income from the trust is to be paid to his four grandchildren.

Which of the following powers retained by the grantor of the trust will cause all or a portion of the trust assets to be includible in his gross estate for federal estate tax purposes?

l. The power to add principal to the trust

II. The power to vary the amounts of trust income paid to each grandchild

l only

II only

Both l and ll

Neither I nor II

35. Which of the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship is correct?

Nonqualified joint tenants may have unequal interests in the property.

Qualified joint tenancies cannot be severed without mutual consent.

Upon the death of a joint tenant, the surviving joint tenant receives the decedent’s interest by operation of law.

This form of ownership is limited to real property.

36. Which of the following statements concerning the inclusion and valuation of all or part of a commercial annuity in the estate of an annuitant is (are) correct?

l. A life annuity with a period certain is includible to the extent of the present value of any remaining guaranteed payments.

ll. If the executor elects the alternate valuation date; an annuity is includible at its replacement cost 6 months after death.

l only

II only

Both l and ll

Neither I nor II

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

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

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

The 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.

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

38. Which of the following is (are) a permissible deduction from a decedent’s gross estate to determine the decedent’s adjusted gross estate?

l. Expenses incurred for the benefit of individual heirs.

II. Expenses incurred in the collection of estate assets.

l only

II only

Both l and ll

Neither I nor lI

39. All the following statements concerning real properly ownership by married couples as joint tenants with right of survivorship are correct EXCEPT:

The deceased spouse’s interest in the properly qualifies for the marital deduction since it passes outright to the surviving spouse.

All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse’s estate.

Jointly held property between spouses does not pass through the probate estate of the first spouse to die.

In common-law states the total value of the properly receives a stepped-up tax basis in the estate of the first spouse to die.

40. The interest rate for loans from the Federal Land Sank is 8 percent.

For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of

$500,000

$600,000

$700,000

$820,000

Page 5 of 12

41. Which of the following statements concerning the valuation of intangible personal property in the gross estate of a decedent is correct?

If there were no trades of a listed common stock on the date of the stockholder’s death, the stock’s value is based on its average daily price for the previous month prior to the shareholder’s death.

Certain

Treasury bonds that are used to pay federal estate taxes at par are valued at their market price on the date of death of the owner.

When a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the “blockage” rule.

Valuing closely held stock requires the consideration of several factors outlined by IRS rulings.

42. Which or the following statements concerning charitable guaranteed annuity interests is (are) correct?

I. To qualify for an estate tax charitable deduction, guaranteed annuity interests must be made in trust.

ll. These interests refer to the charity right to receive a determinable income amount at least annually for a specific term or lire (lives) or one or more no charitable beneficiaries.

l only

II only

Both l and lI

Neither I nor II

43. Many trust instruments provide for the removal of the original trustee. Valid reasons for removing the original trustee include which of the following?

l. A shift in trust situs is desirable because of changes in law.

II. The beneficiary has moved his or her residence to a distant state.

l only

II only

Both l and ll

Neither I nor lI

44. A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1, 50, 0000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner.

Which of the following statements concerning this action is (are) correct?

l. If the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.

ll. If the husband dies first; the probate costs of his estate could be increased.

l only

II only

Both l and II

Neither I nor II

45. Which of the following statements concerning the ownership of real property as joint tenants with right of survivorship is correct?

If the joint tenants are brother and sister and the brother contributed all the funds to purchase the property, one-haIf of the value of the property will be excluded from the sister’s estate if she dies first.

If three sisters inherited property as joint tenants with right of survivorship, the entire value of the property will be in the estate of the first to die.

If the joint tenants are husband and wife, because this is a qualified joint interest, the entire value of the property will be in the estate of the husband regardless of which spouse dies first.

If the joint tenants are two brothers and each contributed one haIf the property’s purchase price, only one haIf the property’s value will be in the estate of the first brother to die if his executor proves that the other brother contributed haIf of the purchase price.

46. Under the terms of his will, a man left his residuary estate to a testamentary trust for the benefit of his wife.

Which of the following powers with respect to the trust will cause the entire trust principal to be includible in the gross estate of the widow for federal estate tax purposes?

The power of the widow each year to direct the trustee to pay her the greater of 5 percent of the trust principal or $5,000

The power of the trustee in its sole discretion to distribute trust assets to the widow for any reason satisfactory to the trustee

The power of the widow to direct the trustee to use trust assets to pay her personal debts

The testamentary limited or special power of the widow to direct the trustee to distribute trust assets to her heirs.

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.

I only

II only

Both I and lI

Neither I nor II

48. A father bought stock for $100,000 and gave it to his son when it was worth $300,000. The father paid no gift tax on the transfer.

When the son sold the property 2 years after the gift, his income tax basis was

$100,000

$200,000

$300,000

49. The failure of an individual to have a will can result in all the following EXCEPT:

The decedent’s state of domicile might receive the property left by the decedent.

Testamentary gifts to charity cannot be made.

Unnecessary death taxes may be imposed.

A surviving spouse receives only his or her elective share.

50. All the following are grounds for contesting a will EXCEPT:

The instrument is a forgery.

The testator executed a later valid will.

The testator did not have testamentary capacity.

The widow was bequeathed less than her intestate share.

Page 6 of 12

51. A man died in February of this year. Last year, when he learned that he had terminal illness, he immediately made the following gifts and filed the required gift tax return:

Fair Market Value

Gift of listed stock to a qualified charity $200,000

Gift of listed bonds to his wife 300,000

Gift of a boat to his son 10,000

Gift of a sports car to his daughter 10,000

What amount must be brought back to the man’s estate as an adjusted taxable gift in the calculation of his federal estate taxes?

$200,000

$290,000

$520,000

52. Which of the following actions on the part of a trustee is a breach of his duties?

Purchasing assets for personal use from the trust at their fair market value with the approval of all beneficiaries

Placing cash from the sale of securities in a high yield money market fund pending a decision to invest the funds elsewhere

Purchasing securities in good faith from a third party just prior to a sharp decrease in their value

Investing all trust assets in securities that favor the income beneficiaries to the detriment of remainder persons

53. Income earned but unpaid at the time of a decedent’s death is deemed to be income in respect of a decedent (IRD). All the following statements concerning IRD are correct EXCEPT:

The income must be reported on the decedent’s final federal income tax return.

The income is taxable to the person or entity receiving it.

The income may be included on both the estate tax return and the estate income tax return with a corresponding deduction.

IRD includes sales commissions earned prior to the decedent’s death and paid to the estate according to the intestacy laws.

54. 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.

l only

II only

Both l and ll

Neither I nor II

55. Which of the following statements concerning a simple trust is correct?

Income and principal may be distributed to a qualified charily.

It receives a special tax deduction for income distributed to its beneficiaries.

Income is accumulated at the discretion of the trustee.

It limits the number of permissible beneficiaries.

56. Which of the following transactions is a taxable gift for federal gift tax purposes?

A mother purchased listed common stocks titling them in joint names with her daughter and the stocks have not yet been sold.

A father made a deposit of $100,000 into a bank account titled jointly with his son, and the son has not yet made any withdrawals.

A man deeded real estate to his sister but did not record the deed nor did he deliver the deed to his sister.

A grandmother purchased a

savings bond that is registered as payable to her and her two grandchildren and the bond has not yet been surrendered for cash.

57. It a grantor establishes an irrevocable trust; the income of the trust will be taxed to the grantor if it is used to pay premiums for life insurance on the life of

a child of the grantor

the spouse of the grantor

a grandchild of the grantor

the father of the grantor

58. All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:

A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild’s parents are still alive.

A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.

A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.

A termination of a trust at the death of the non skip life income beneficiary with the remainder distributed solely to skip persons.

59. All the following statements concerning ante nuptial agreements are correct EXCEPT:

They are frequently used prior to second marriages.

They can often deal with a surviving spouse’s right to an intestate share of a deceased spouse’s estate.

They can protect the interests of children of former marriages.

Income tax problems are avoided when property is transferred subject to such an agreement.

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

The GSTT is imposed only if no federal estate or gilt tax applies to a transfer.

An annual exclusion is available for direct skip guts to a grandchild

The applicable credit amount may be applied against generation-skipping transfers.

The GSTT is inapplicable to transfers to nonrelated transferees.

Page 7 of 12

61. A wealthy individual might consider selling a substantially appreciated property interest in an installment sale for which of the following reasons?

I. To spread the taxable gain inherent in the property over the period of the installments

Il. To provide a buyer who lacks the requisite funds for a lump-sum purchase with the ability to finance the acquisition

l only

II only

Both l and II

Neither l nor II

62. Which of the following statements concerning state death tax exemptions and tax rates for classes of estate beneficiaries is (are) correct?

I. Exemptions are determined by the closeness of the beneficiary’s blood relationship to the decedent.

II. Closest relatives receive the lowest tax rates and lowest exemption amounts.

l only

II only

Both l and ll

Neither I nor II

63. Which of the following statements concerning the inclusion and valuation of all or part of a commercial annuity in the estate of an annuitant is correct?

A life annuity with a period certain is includible to the extent of the present value of any remaining guaranteed payments.

An annuity is includible to the extent of the value determined by the special 10-year averaging rule.

If the executor elects the alternate valuation date an annuity is includible at its replacement cost 6 months after death.

A joint and survivor annuity is includible to the extent that the survivor paid the purchase price of the contract.

64. The executor of an estate has a choice of waiving the executor’s fee. Factors that should be considered by the executor in making this choice include all the following EXCEPT:

whether the executor is otherwise a beneficiary of the estate

the income tax bracket of the executor

the estate tax bracket of the estate

the income tax brackets of the other beneficiaries

65. All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:

A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild’s parents are still alive.

A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.

A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.

A termination of a trust at the death of the non skip life income beneficiary with the remainder distributed solely to skip persons.

66. 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.

l only

II only

Both land ll

Neither I nor II

67. A father wants to accumulate funds for his 12-year-old son’s college education. On the advice of his attorney, the father establishes an IRC Section 2503(c) trust and funds it with annual gifts. All the following statements concerning this arrangement are correct EXCEPT:

The trust must be irrevocable.

The father’s annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.

Any accumulated income and all trust principal must be available for distribution to the son when he attains age 21.

In the event of the son’s death prior to age 21, trust assets must either be payable to the son’s estate or be subject to a general power of appointment held by the son.

68. All the following powers held by the grantor of an irrevocable trust will cause the trust assets to be brought back into the estate of the grantor EXCEPT the power to:

terminate the trust

change the trust remainder persons

add principal to the trust

designate who shall enjoy the trust income

69. Which of the following statements concerning revocable trusts is correct?

The transfer of properly to a revocable trust is typically motivated by non tax reasons.

A transfer of property to a revocable trust is treated as a completed gift.

A transfer of income-producing properly to a revocable trust will result in favorable income tax treatment for the grantor.

Property of a revocable trust will be included in the grantor’s probate property.

70. To determine whether a taxable gift has been made, the IRS focuses on all the following factors

EXCEPT:

Was the transferred property real property or personal property?

Was the value of the gift property in excess of the annual per-donee exclusion?

Did the donor absolutely, irrevocably, and currently divest himseIf of dominion and control over the property?

Was the property transferred for less than an adequate and full consideration in money or money’s worth?

Page 8 of 12

71. All the following statements concerning real property ownership by married couples as joint tenants with right of survivorship are correct EXCEPT:

The deceased spouse’s interest in the property qualifies for the marital deduction since it passes outright to the surviving spouse.

All benefits of ownership remain available to the surviving spouse without interruption during the administration of the deceased spouse’s estate.

Jointly held property between spouses does not pass through the probate estate of the first spouse to die.

In common-law states the total value of the property receives a stepped-up tax basis in the estate of the first spouse to die.

72. Which of the following statements concerning the gift or estate tax charitable deduction is (are) correct?

II. If the donor retains an interest in property contributed to a qualified charity during life time, the value of the property may be included in the donor gross estate.

II. An estate tax charitable deduction is allowed for the full value of property transferred to a qualified charity but only if the property is included in the donor gross estate.

l only

II only

Both l and ll

Neither I nor II

73. Which of the following statements concerning a testamentary trust is correct?

It becomes effective only at the death of the grantor.

The trust terms must be included in the will.

The assets in the trust are tree of probate costs.

It saves federal and state death taxes at the death of the grantor.

74. 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?

Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds

Make her annual gifts of enough interest income from the tax free municipal bonds in his port folio so that she will be able to support herseIf

Make her a gift of enough corporate bonds from his port folio so that she will be able to support herseIf from the interest payments

Purchase corporate bonds that pay interest in an amount sufficient for her to support herseIf and assign the interest payments to her

75. A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year, while still living in the house. The following are relevant facts: The father bought the property in 1980 for $140,000. The fair market value of the property when the gift was made in 1990 was $170,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father’s death was $200,000. The daughter sold the property 3 months after her father’s death for $200,000.

She had a gain of

$130,000

$160,000

$200,000

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

I. The cost basis of the partner’s business interests.

ll. The amount of the partner’s individual personal net worth’s

l only

II only

Both l and II

Neither l nor lI

77. A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes

to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required EXCEPT:

His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

His refusal to accept the inheritance must be in writing.

His refusal to accept the inheritance must be received by the executor of his father’s estate within 9 months of his father’s death.

He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.

78. Which of the following statements concerning a power of appointment is correct?

A limited power of appointment permits the donee of the power to exercise the power in favor of anyone except the donee’s family members.

The recipients of the properly after the donee exercises the power of appointment are known as the appointees.

A donee who possesses a special power of appointment at the time of his or her death has the properly included in the gross estate.

The time that a special power of appointment may be exercised may not be restricted by the donor when creating the power.

79. 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.

l only

II only

Both l and Il

Neither l nor ll

80. The estate planning process includes all the following activities EXCEPT:

the selection of the estate plan by the financial planner

evaluating a client’s present estate plan

gathering a client’s family and financial data

designing a client’s new estate plan

Page 9 of 12

81. The following are facts concerning a decedent’s estate:

Taxable estate $1,800,000

Pre-1977 taxable gifts 100,000

Post-1976 adjusted taxable gifts 150,000

Post-1976 gifts made to a qualified charity 200,000

The tentative tax base of this estate is

$1,650,000

$1,600,000

$1,950,000

$2,150,000

82. 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

only

II only

Both l and II

Neither l nor ll

83. All the following trust provisions avoid causing the inclusion to an irrevocable life insurance trust in an insured’s gross estate EXCEPT:

a trustee’s power to pay estate expenses

a trustee’s power to loan assets to the estate at the trustee’s discretion

a trustee’s power to purchase assets from the estate at the trustee’s discretion

a trust beneficiary’s power to withdraw contributions to the trust

84. A man is planning to establish and fund a 20-year irrevocable trust for the benefit of his two sons, aged 19 and 22, and plans to give the trustee power to sprinkle trust income.

From the standpoint of providing federal income, gift, and estate tax savings, which of the following would be the best choice of trustee?

The grantor of the trust

The grantor’s 70-year-old father

The grantor’s 22-year-old son

A bank or trust company

85. A man established and funded an irrevocable trust and named a bank as trustee. All income from the trust is to be paid to his four grandchildren.

Which of the following powers retained by the grantor of the trust will cause all or a portion of the trust assets to be includible in his gross estate for federal estate tax purposes?

l. The power to add principal to the trust

ll. The power to vary the amounts of trust income paid to each grandchild

l only

II only

Both l and II

Neither I nor II

86. Which of the following statements concerning state death taxes is correct?

A deduction for the full amount of state death taxes paid by a decedent estate is allowed on a decedent federal estate tax return.

A state estate tax is imposed on the right of heirs to receive property from the deceased.

A state inheritance tax is imposed on the right of the deceased to leave property to heirs.

State estate and inheritance taxes are generally imposed at the same rate regardless of the relationship of the deceased to the beneficiary.

87. 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.

l only

II only

Both l and ll

Neither I nor II

88. A father is considering giving his daughter a gift.

For tax planning purposes, the father should give his daughter which of the following?

Raw land that cost him $10,000, its present fair market value, but which has a substantial potential for appreciation

Real estate that cost him $40,000 and is now worth $120,000, subject to a $110,000 mortgage

A bond that cost him $15,000 and is now worth $10,000

Stock that cost him $10,000 and which now has a fair market value of $20,000

89. The primary objective in estate planning is to:

reduce estate taxes to the lowest amount possible

reflect accurately the client’s wishes concerning the disposition of his or her wealth

preserve the marital deduction and applicable credit amount credit

prevent the intestate distribution of assets

90. 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?

Make her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds

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 herseIf

Make her a gift of enough corporate bonds from his port folio so that she will be able to support herseIf from the interest payments

Purchase corporate bonds that pay interest in an amount sufficient for her to support erseIf and assign the interest payments to her

Page 10 of 12

91. For estate tax purposes which of the following is (are) a form of charitable gifts that may qualify for the charitable deduction?

l. Split gifts

ll. Charitable remainder trusts

l only

II only

Both l and II

Neither I nor II

92. All the following trust provisions avoid causing the inclusion of an irrevocable life insurance trust in an insured’s gross estate EXCEPT:

a trustee’s power to pay estate expenses

a trustee’s power to loan assets to the estate at the trustee’s discretion

a trustee’s power to purchase assets from the estate at the trustee’s discretion

a trust beneficiary’s power to withdraw contributions to the trust

93. A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1,500,000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. All the following statements concerning this action are correct EXCEPT:

At the husband’s death, it would be easier to qualify his estate for an NRC Section 303 stock redemption of his business interest.

At the husband’s death, his heirs would get a fully stepped-up tax basis for the property.

If the husband dies first and leaves the office building outright to his wife, there would be no federal estate tax attributed to its inclusion in his gross estate.

If the husband dies first, the probate costs of his estate could be increased.

94. All the following statements concerning a federal estate tax deduction for a bequest or gift to a qualified charily are correct EXCEPT:

A life insurance policy that was assigned to a charity as a gift less than 3 years prior to the insured’s death qualifies for a charitable deduction.

The amount of a charitable deduction is reduced by any taxes and administrative expenses chargeable against the bequest.

An estate may deduct the value of the remainder interest in a charitable remainder trust.

The amount of a charitable deduction may not exceed 50 percent of a decedent’s adjusted gross estate.

95. A $20,000 bank account. Mr. and Mrs. Allen own the account jointly with the right of survivorship even though Mrs. Allen made all the deposits.

What amount of the family property? will be included in Mr. Allen’s gross estate for federal estate tax purposes?

$160,000

$300,000

$350,000

$360,000

96. 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. It is an irrevocable arrangement in which the remainder interest passes to charity.

l only

II only

Both l and ll

Neither l nor ll

97. In addition to substantial probate assets, a married man with two minor children has a $1000,000 ordinary life insurance policy payable to his estate. He wants to make certain that if he predeceases his wife the death proceeds will be available to provide income for his wife during her life time and to provide for their two children after her death. He would like the policy and/or its death proceeds to be as free of federal gift and estate taxes as possible with respect to both him and his wife.

Which of the following courses of action would best accomplish these objectives?

Assign the policy to his wife who will establish a revocable inter vivos trust to receive the death proceeds

Establish a revocable inter vivos trust and designate the trustee to receive death proceeds

Assign the policy to an irrevocable inter vivos trust with five and five powers and designate the trustee to receive the death proceeds

Designate his wife as beneficiary and she will establish a testamentary trust in her will to receive the proceeds at her subsequent death

98. 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.

l only

II only

Both l and II

Neither l nor ll

99. A father died leaving his property equally to his wealthy son and his poor daughter. The son wishes to disclaim his share of the inheritance so that it will pass to his sister without his incurring any gift tax liability. In this situation, all the following acts on the part of the son are required EXCEPT:

His refusal to accept the inheritance must direct specifically that his sister is to receive it instead.

His refusal to accept the inheritance must be in writing.

His refusal to accept the inheritance must be received by the executor of his father’s estate within 9 months of his father’s death.

He must not have received any part of his inheritance or any income from it prior to his refusal to accept it.

100. 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.

l only

II only

Both l and II

Neither I nor II

Page 11 of 12

101. Which of the following statements concerning estates and trusts is (are) correct?

l. Both estates and trusts come into being by operation of law.

II. The personal representative of an estate and the trustee have similar fiduciary responsibilities.

I only

II only

Both l and II

Neither I nor II

102. Which of the following types of real property ownership will be deemed to be a tenancy in common?

Two brothers own equal amounts of all the common stock in a corporation, the only asset of which is real property.

Two brothers own equal undivided interests in a piece of real property, with each brother being able to divest himseIf of his interest by sale, gift, or will.

Two brothers are equal partners in a general partnership that owns a piece of real property used in the partnership business.

Two brothers own equal fractional interests in a piece of real property and at the death of one of the brothers the survivor will own the entire piece of property.

103. The failure of an individual to have a will can result in all the following EXCEPT:

The decedent’s state of domicile might receive the property left by the decedent.

Testamentary gifts to charity cannot be made.

Unnecessary death taxes may be imposed.

A surviving spouse receives only his or her elective share.

104. The personal representative of a decedent has the duty to file which of the following income tax returns?

l. The decedent’s final income tax return

II. The estate’s income tax return

l only

II only

Both l and ll

Neither I nor Il

105. A married man died this year leaving a gross estate of $3,200,000.

Additional facts concerning his estate are:

Administration expenses and debts $ 250,000

Marital deduction 1,200,000

Applicable credit amount (2005) 555,800

Applicable exclusion amount (2005) 1,500,000

State death taxes payable 20,400

Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over$1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000, the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000.

Based on these facts, the net federal estate tax payable is

$103,320

$123,720

$128,280

106. Believing that his death was imminent, a widower gave his son some real estate two years ago, and

filed a timely gift tax return. The widower died on January 1st of this year.

Additional facts are:

Widower’s basis in the real estate $200,000

Value of real estate when gifted 510,000

Value of real estate on date of death 1,000,000

Amount of gift tax paid by widower 159,500

Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:

The gift of the real estate is included in the calculation of the widower’s federal estate tax as an adjusted taxable gift.

The gift tax paid is brought back into the widower’s gross estate at $159,500.

The widower recognized no capital gain for income tax purposes at the time the gift was made.

The son’s income tax basis in the real estate is $1,000,000.

107. To qualify the seller of property for installment sale tax treatment, the transaction must meet which of the following conditions?

At least 30 percent of the purchase price must be paid in the year of sale.

The entire purchase price must not be paid in the taxable year of sale.

There must be no more than ten installments.

All installments must be in equal amounts of principal.

108. All the following statements concerning property ownership by a married couple residing in a community-property state are correct EXCEPT:

All property that is not separate property is community property.

Community property loses its identity when a community-property couple moves to a common-law state.

Property inherited during the marriage is the separate property of the spouse who inherited it.

Income earned by one spouse becomes community property.

109. The decedent, Z, died this year.

The facts concerning Z estate are:

Gross estate $3,200,000

Marital deduction $1,100,000

Charitable deduction 80,000

Gifts made after 1976 115,000

State death taxes payable 215,000

What is Z taxable estate?

$1,590,000

$1,690,000

$1,805,000

$1,920,000

110. A father plans to create a trust for the benefit of his 22-year-old son and wishes to take advantage of the gift tax annual exclusion. He has named a bank as trustee.

Which of the following trust provisions would cause the gifts to be ineligible to qualify for the gift tax annual exclusion?

l. The trust income is to be paid to the son or accumulated at the discretion of the trustee.

II. The income is to be accumulated until the son reaches age 32 when all accumulated income and principal are to be distributed to him.

l only

II only

Both l and ll

Neither I nor II

Page 12 of 12

111. All the following statements concerning an estate for a term of years are correct EXCEPT:

It is an interest in property established for a specific duration.

The tenant has the right to possess the property during the term of his interest.

The tenant may transfer the property at the end of the term of his interest.

An interest may extend beyond the lifetime of the grantor.

112. 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.

l only

II only

Both l and ll

Neither I nor II

113. Which of the following statements concerning ownership of property under a tenancy by the entirety is correct?

One tenant can freely transfer his or her property interest to a third person.

It is a form of property ownership available only to married persons.

The property will be in the probate estate of the first joint tenant to die.

It is a form of property ownership that applies only to personal property.

114. A wife makes outright gifts of $76,000 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?

Wife $17,000, husband $37,000

Wife $27,000, husband $27,000

Wife $37,000, husband $37,000

Wife $54,000, husband 0

115. 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.

l only

II only

Both l and ll

Neither I nor II

116. Tax benefits of making life time gifts in excess of the gift tax annual exclusion include all the following

EXCEPT:

The gift tax paid on a gift made more than 3 years prior to the death of the donor avoids inclusion the donor’s gross estate.

Appreciation in the value of a gift of real property after the date of the gift increases the donor’s federal estate tax liability.

Income taxes can be saved if a high-income donor gives income-producing property to a lowincome donee.

Gift taxes are payable at the same tax rate as estate taxes.

117. All the following statements concerning a grantor-retained unitrust (GRUT) are correct EXCEPT:

The transfer of the remainder interest in the trust is a current gift for gift tax purposes.

When the trust is created, the grantor makes an irrevocable transfer to remainder person(s).

The grantor’s applicable credit amount may be applied to the gifted remainder interest in the trust.

When the grantor dies during the retained interest term, the estate tax benefits are increased.

118. All the following statements concerning transfers at death under a will are correct EXCEPT:

The most appropriate way to sever a joint tenancy with right of survivorship is for the joint tenant-decedent to make a specific bequest of the property under a will.

If during life time a decedent disposed of property that was the subject of a specific bequest, ad emption occurs.

It is common for a will to contain a clause that exempts the executor from posting bond.

Specific bequests of a decedent’s property are satisfied prior to distribution of the decedents residuary estate.

TAGS:

HS-330, HS-330 exam dumps

Notify of

Label

Name*

Email*

Website

Label

Name*

Email*

Website

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments

Posts

Get HS-330 Dumps Full Version

Q&As: 400
Versions: PDF and Software Download Now

About Dumpsinfo

Dumpsinfo is a good platform providing the latest exam information and dumps questions for all IT certification exams. You can study all the latest exam dumps questions online.

[email protected]

Mon - Sat 9:00am - 6:00pm

Pass HS-330 Exam to Get American College Certification

Related

Posts

About Us

EMAIL

Services

Opening Hours