Night before the exam Flashcards
What is section 2032A about?
special use valuation for estate tax reduction
rules to qualify for Sec. 2032A
50% of gross estate must be real and personal property
25% of gross estate real property
real estate must be used for closely held biz,
amount of estate tax relief under S 2032A
$750K reduction in decedent’s gross estate. ($1.18mm in 2020)
Restriction on S 2032A
5 of 8 rule before death, 10 years after death, decedent and/or his fam
What is Section 303?
it’s closely held stock redemption
Rules for 303
must be a private corp
stock must be > 35% of gross estate for decedent
stock redeemed is cap gain
cannot exceed sum of taxes plus admin exp
What’s Section 6166 about?
installment payment of estate taxes
rules on 6166
interest starts day of death
value of bizs must > 35% of adjusted gross estate
up to 14 years. first for interest only
interest rate 2% but not deduct on first 1.57mm
you do get step up on basis, so usually no CG
FDIC treatment of joint accounts
pretty sure you get $250,000 per institution on all joint accounts put together! awfully theoretical.
what does the constant dividend growth model measure?
value of the stock TODAY based on next year’s dividend
How do you value income real estate?
Take NOI/NOL and divide by the cap rate
in an insurance question like the one on pract exam, consider insurance reimbursement a cash flow
Where do we find annual imputed interest being part of gross income?
zero coupon bonds
APT
arbitrage pricing theory
number of factors in pricing theories?
Div discount/CAPM 1
APT mult
Limitation on AOC (unexpected)
you can’t get more of a credit than you spent
do both spouses need to file a 709 with a $150K 529 gifting strategy?
yes
Can you have Medicare as secondary coverage?
yes, beginning age 65
DEF: split-dollar life insurance plan
premium and death-benefit sharing arragment between ER and EE, common with key execs not to rank & file
does HO-6 cover roof of condo?
no, the building’s policy does, silly!
fraud on insurance, even on death
policy can definitely be rescinded
what about foster children, adopted, court ordered guaradian, stuff like that?
exactly like family
NII against calculation
STCG, LTCG, child’s int (if on his return), royalties and ord dividends
wash sale
count 31st day following carefully
paying estimate tax 90/100/110. 150k AGI last year.
it’s 100% of last years or lesser of 90 of this year or 110% of last year. weird.
