NEED TO KNOW

Question 1

2503 (c)

Answer 1

minor qualify for present interest gift

** does NOT have to be distributed until 21

Question 2

6166

Answer 2

pay over time (due to business being illiquid)

business included in gross estate if more than 35%

Question 3

GRAT

Answer 3

= ANNUITY
= flat payment (principal) tax free

• When put money into it, like giving it to yourself
• “estate freezing”
• have to outlive trust term

Question 4

ILIT

Answer 4

= LIFE INSURANCE/ IRREVOCABLE
= wants proceeds out of the estate & into trust to avoid estate tax

• can gift premiums to bene (present interest)
• Crummery provision (except for special needs)

Question 5

ABLE

Answer 5

like special needs 529

Question 6

QDRO

Answer 6

(C trust)

splitting up pension (court order) in divorce

Question 7

Marital deduction

Answer 7

unlimited

Question 8

Self-settled SNT

Answer 8

= special needs OWN money & goes to gov. (Medicaid)

Question 9

Annual exclusion

Answer 9

$15,000

*always has to be present interest

Question 10

Installment note

Answer 10

selling business in installment (sale proceeds)

• basis (tax free)
• growth (capital gain)
• interest (income tax)

Question 11

Letter of Intent

Answer 11

detailed/ personalized letter

Question 12

nonqualified deferred comp

Answer 12

C corp

Question 13

C corp

Answer 13

= DOUBLE TAXATION

NOT wanted in small closely held business

Question 14

Provisional Income

Answer 14

provisional = AGI + interest + 1/2 social