Estate Flashcards
EST. 2.2 Why would an insurance policy owned by the spouse or a single life annuity not be included in the owners gross estate?
Insurance policy has no incident of ownership and the single life annuity has no value once he dies.
Est 2.2 What is included in the 3 year rule?
- Certain transfer of life insurance by the insured
- Any gift tax paid out of pocket on gifts.
Property or cash gifted is not subject to the 3 year look back
EST. 2.5 which of the following items is/are deductible from Fred’s adjusted gross estate to arrive at a taxable estate?
Property held by the entirety, an insurance policy on Fred’s life naming his wife as been, a bequest of 50k to Fred’s Alma mater, a bequest of 10k to Fred’s favorite club.
1,2,3
Property held by entirety transfer to spouse, insurance policy must be assumed be owned by Fred.
EST 2.7 Can a gift tax exemption be used after the client passes?
No, gifting can only be done by living ppl. Therefore the gift tax exemption would t apply.
Ret. 2-14 Which one would be included in the clients gross estate for federal estate tax purposes? Taxable gifts, A general power of appointment?
A general power of appointment.
Taxable gifts are added to the taxable estate.
EST. 3.2 What are the exceptions to future interests?
- Gifts in trust of future interests on behalf of minors
- 2503c trusts
- Crummy trusts
- 529 plans
EST. 3.3 What is the super annual gift tax exclusion for non US citizen spouse?
185,000
EST. 3.3 Client gifts stock 218k to daughter. Basis is 20k. What is the taxable gift?
200k.
218- 18k (annual exclusion)
EST. 3.6 client bought stock for 1,017,000. Stock increased to 200k, but by the time it was gifted to the son, the stock FMV was 1,017,000. Client paid 400k in gift tax. What’s the son’s basis?
1,017,000
No appreciation so you can’t use gift tax paid to increase basis.
EST. 3-6 What are 5 important rules regarding taxable gifts and estate tax?
- Adjustable taxable gifts exceeds the annual exclusion of 18k that applied in the year of the gift.
- Adjustable taxable gifts are added to the taxable estate
- Gift tax paid (or payable) are generally allowed as a credit against the tentative estate tax
- Gift taxes paid on any gifts within three years of death are added to the gross estate
- Gift tax exemption is 13,610,000
EST. 3.7 When must a form 709 be filed?
When more than 18k is donated to any non spouse donee, a gift of future interest in any amount, a gift for which a spouses elect gift splitting
EST. 3-12 Lucy AGI 200k gifts her Universal life policy to a public charity. Face value is 500k, cash value is 80k, and the basis is 50k. What amount is charitable income tax deduction that Lucy can claim?
50k
Note: this is not a LTCG type that can be value at FMV for charitable income tax deduction purposes. Must use the lesser of FMV or basis.
EST. 5.1 In the inter vivos trust, the () holds legal title, and the () have/has equitable title.
Trustee, Beneficiaries
