Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ELLIE CFP Flashcards > Estate 2 > Flashcards

Estate 2 Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Not a Completed Gift

A
  • revocable trust
  • disclaimer
  • disclaimer trust

-no gift tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Gift of future interest

A
  • no 15k exclusion
  • 2503b
  • remainder interest
  • a trust with income accumulating
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Gift of present interest

A
  • 15k exclusion
  • 2503c
  • direct gift
  • crummier trust
  • 529 plans
  • UGMA/UTMA
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What can operate as a simple trust

A
  • QTIP
  • 2503b
  • irrevocable
  • spray
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How to remember form 709

A

GAT
BTN

-GROSS
Minus expenses, admin fees, debts, taxes, casualty losses
-AGE
Minus marital charitable
-TAXABLE ESTATE
PLUS adjusted taxable gifts
-TAX BASE
Minus exemption amount times tax rate
-TENTATIVE TAX
Minus gift taxes paid
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Life insurance gift tax ability

A

During lifetime, if insured gifts the policy, taxable gift is the interpolated terminal reserve plus the unearned premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

ILIT TAXABILITY

A

As long as it’s been 3 years since transferring policy to an ILIT, it’s not included in your gross estate

  • The funded ILIT (not crummy) is income taxable to grantor
  • For the unfunded since there’s no “income” being produced and you’re just gifting the premium payment in every year there’s nothing to really pay income tax on
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Simple trusts

A

2503b, QTIP, QDT, Dynasty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Complex trusts

A

2503b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Crummy trust

A

Irrevocable
Demand rights
Typical use is in an ILIT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

5 or 5 estate tax

A

Kid dies with a 5% general power interest

  • if they haven’t taken out 5%, included in their estate
  • if they took out 5% and spent it, not included
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Ascertainable standard taxability

A

Distributions for ascertainable standard have no gift or estate tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Bypass Trust, nonmarital, B non marital, family

A
  • can be simple or complex
  • property transferred at death
  • descendent has postmortem control
  • can be set up to provide income to wife or other peeps (may have right to invade corpus)
  • as long as only hems or 5/5 withdrawal rights, bypass will not be included in surviving spouses estate. At death of wife, assets pass tax free
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Marital Trust A trust-power of appointment trust

A

Second spouse to die controls
Consists of property transferred at defendants death
Surviving Spouse has transfer control over property-can invade entire corpus
Qualified for Marital deduction
Subject to estate taxes after wife kicks it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

QTIP/C trust—simple trust

A 
First spouse to die controls
“Current income trust”
Qualified for marital deduction
Included in gross estate of surviving spouse when she kicks it
Serving spouse may have limited power of invasion over corpus and income of a QTIP
Lifetime income interest for spouse
Annual payments to spouse
Mandatory payments to spouse
Exclusively for spouse
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

QDT/QDOT-simple trust

A

To qualify for marital deduction assets must be in QDT. Similar to QTIP, but for noncitizen spouse

17
Q

UTMA UGMA Custodian estate

A

Can be included in custodians estate

18
Q

2503b

A

Bad boy trust
Simple trust
Gift of future interest into the trust(no exclusion)
Income must be distributed (15k exclusion allowed)
Income to bene is excluded from estate tax, but taxed as income tax

19
Q

2503c

A

Complex trust
Taxed at trust rates
You get annual gift exclusion on contributions
Trust property and income must be spent by child before 21
If child dies, it’s included in child’s estate

20
Q

Dynasty trust

A

Simple trust

Free of gift, estate, and gst taxes

21
Q

Installment sale

A

Pigs need income
Don’t use if there is an estate issue (worried about estate taxes) or if there is depreciated assets (1245 prop)
At death, PV of remaining payments are included in decedents estate

22
Q

SCIN

A

Pigs need income
Use if there is an estate issue or depreciated assets
No value is included in owners estate
Higher payment than installment— based on owners age
Gain is a cap gain

23
Q

Private annuity

A

Usually wrong answer
Promise, not secured so you can’t sue your daughter
No value is included in estate-yay!
Taxed for errrything in year it has been established

24
Q

GRAT/GRUT

A

Irrevocable trust
Grantor makes gifts of property while retaining income interest
At the end of term, remainder of corpus is paid to the remainderman
Longer the term, bigger discount you get (value of gift is discounted)
Best asset -ones that’s going to appreciate!
STRING

25
Q

Partnership/Scorp

A 
Property owner wants to gift assets/income to others
Gift of shares-get 15k exclusion
Fam gets conduit income from the shares
No service related!
Watch out for kiddie tax
26
Q

Family limited partnership-FLP

A

Property owner wants to gift assets/income to others
Shift income from parents to children-income can’t come from personal services of general partner
Valuation discount 50%-lower gift tax
General partner maintains control

27
Q

Gift leaseback

A

Property owner wants to gift assets/income to others
Gives fully depreciated assets to a trust or lower income bracket person
Owner only has business assets, can take biz deduction
Don’t use if kid is under 24!

28
Q

QPRT

A

Property owner wants to gift assets/income to others
Irrevocable transfer of a personal residence
End of term-residence is eliminated from grantors estate and passes to the beneficiaries either in a trust or outright
Value of gift is discounted-longer the term, bigger discount
String

29
Q

GSTT

A

Direct skip-15k exclusion-no trus. Transferor pays
Taxable termination-no 15k, gstt paid by trustee/trust
Taxable distribution-no 15k, distribution to skip person-grandchild pays taxes on whatever exceeds 11,400,000. D FOR DOUBLE- because it’s also subject to gift taxes

30
Q

Disclaimer trust

A

Simple, similar to bypass trust

Spouse can disclaim property yet receive stream of income

31
Q

Section 303 stock redemption

A

Estate liquidity-postmortem
MUST BE CORP, MUST BE CLOSELY HELD
Value of stock must be more than 35% of ADJUSTED Gross Estate
Only the amount of stock = to all estate taxes & admin expenses can be redeemed

32
Q

Installment payment of estate taxes- y6166

A

Estate liquidity-postmortem
Allows you to pay estate taxes overtime
Must be sole proprietorship, partnership, or corporation
Value of business must be more than 35% of ADJUSTED Gross Estate

33
Q

Special use valuation-2032A

A

Estate tax reduction
Method to discount the valuation of real estate used in connection with a closely held biz, or farming operation.
Max reduction=1,160,000
25% of GROSS Estate must consist of real property used in business
-must have been held for 5 out of last 8 years
-must be continued to use for qualified use for 10 years after descendent death

ELLIE CFP Flashcards (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions