REG21 Flashcards
Does a lien arising by operation of law subsequent to the perfection of any security interest will be subordinate to the earlier perfected security interest because of the first-in-time, first-in-priority rule?
No, a person may receive a common law or statutory lien to secure payment if the goods are in the person’s possession. The UCC describes this lien as a possessory lien and has priority over a security interest in the goods (whether or not perfected) unless the lien is statutory and the statute expressly provides otherwise.
In an auction, when can the goods be withdrawn after the auctioneer calls for bids?
When goods are auctioned with reserve, the auctioneer may withdraw them at any time before (s)he announces completion of the sale.
In an auction without reserve, the goods may not be withdrawn after the auctioneer calls for bids unless no bid is made.
In what order are the proceeds of disposition applied?
Reasonable expenses of repossession; the secured debt; subordinate security interests or other subordinate liens; and payment of any surplus to the debtor.
Are additional or different terms in a contract between merchants considered proposals for addition to or changes in the contract?
Yes
If there a letter contained a promise not to revoke the offer but no expiration date, can the offer be revoked within 6 days?
No, the firm offer did not include an expiration date, so the offer was not revocable for a reasonable time, most likely could not revoke the offer after only 6 days.
Does a transaction result in a security interest if the lessee has an option to buy the property for nominal consideration?
Yes
What two conditions must be satisfied before title can pass?
The goods must be in existence and they must be identified to the contract.
If nonconforming goods are shipped without any explanation concerning the shipment, would it be a rejection and a counteroffer?
No, it would have been a rejection and a counteroffer if they had notified within a reasonable time that the shipment was an accommodation.
Can a defense be that the offeree supplied the form and the firm offer wasn’t separately signed?
Yes, if the offeree supplies the form, the firm offer must be separately signed.
The purpose of this rule is to protect an offeror who is unaware that the offeree’s form contains the firm offer term.
How many years between the trust triggers a generation-skipping transfer tax (GSTT)?
37.5 and 62.5
Is a grantor type trust a legal trust under applicable state law that is recognized as a separate taxable entity for income tax purposes?
No, it is not a separate taxable entity for income tax purposes because the grantor or other substantial owners have not relinquished complete dominion and control over the trust.
If a residence owned jointly with a spouse that passes to the spouse is in the gross estate, can you deduct it and how is that figured?
Yes, martial transfers are deductible. Take value of residence - mortgage = deduction form GE
Are life insurance proceeds included in the gross estate and taxable income?
Life insurance proceeds are included in the gross estate, but NOT taxable income.
Are both interest expense incurred on business borrowings and other expenses related to a stock repurchase or reorganization deductible?
Only the interest expense is deductible in the period in which it is paid or accrued. The other expenses are capitalized.
Does gross income of a corporation include all income, unless specifically excluded?
Yes, excluded from a corporation’s gross income are capital contributions by shareholders and any gain or loss realized by a corporation on the sale or exchange of its own stock (including treasury stock).
