Tax, Retirement, Estate Flashcards
(136 cards)
1
Q
when is self employed individual required to file taxes
A
when net earnings are over $400
2
Q
what’s excluded from income relating to education?
A
excluded: scholarship for books and tuition
included: room and board
3
Q
qualified dividends
A
taxed at lower cap gains rate
not ordinary income
4
Q
excludable amount w respect to services for employees
A
20% off purchase price
5
Q
max deduction allowed for interest incurred on investment debt
A
NOI!
you have to opt out of LTCG treatment
6
Q
deductions mean more to ______ taxpayers and credits mean more to _______ taxpayers
A
deductions= wealth
credits= lower
7
Q
1099 worker
A
you don’t need to pay or withhold income or FICA tax
8
Q
FIFO
A
company is selling their lowest cost goods first
9
Q
NOLs and biz entities
A
S Corps and Partnerships CANNOT claim NOLs
10
Q
what happens if you sell to a family member via an installment sale
A
entire gain is reportable
11
Q
which biz entities are eligible for QBI
A
pass-thru entities
12
Q
trusts that are required to distribute all of their income
A
receive income tax exemption of $300
13
Q
tainted to estate AND trust purposes
A
a client should not establish an irrevocable trust that is tainted for BOTH estate and income tax purposes
14
Q
recovery deduction
A
cost + taxes + modification
15
Q
reinvested dividends and IRR
A
NOT included
16
Q
when you’re in the 32% tax bracket, you multiply WHAT times the taxable income?
A
.68
17
Q
1244
A
small biz stock
18
Q
cost recovery deduction is to ______property as 1031 exchanges is to ______ property
A
cost recovery= 1245 (personal property)
1031 exchanges= 1250 (real property)
19
Q
what is the exception for passive activity rules (meaning you can deduct)
A
active real estate
20
Q
phaseout for being able to deduct 25k losses for passive investments
A
150k
21
Q
if pearce court rents for 90 days, you can’t use it for over ____ days
A
9
22
Q
Joan is self-employed. She has provided you with the following information for the current year.
Net Schedule C Income $100,000
Keogh Contribution 18,000
Health Insurance Premium 5,000
Charitable Contributions 10,000
Property Tax 5,000
1/2 Self-employment Tax (given ) 7,065*
*Based on $100,000 net income.
What amount is Joan’s adjusted gross income?
A
B. $69,935
The self-employment tax is $100,000 x .07065. Health insurance premium paid by self-employed persons are deductible as an adjustment for AGI on the front of the 1040
23
Q
Mr. and Mrs. Able have active income of $250,000. They also have portfolio income of $10,000 (interest), $5,000 (qualifying dividends), $10,000 (short-term capital gains) and $15,000 (longterm capital gains). They have been margining their stock portfolio and have incurred $35,000 of investment interest. How much of the investment interest can they deduct?
A. $20,000
B. $25,000
C. $30,000
D. $35,000
A
Answer: A $20,000
Unless the question says they opted out of the qualifying dividend tax rates and long-term gains, they are not usable.
24
Q
Cathy is self-employed. She operates her business from her home. Her gross income is
$100,000. Expenses associated with her business are $30,000. How much of her home office expense of $20,000 can she deduct on her Schedule C form?
A
Answer: $20,000
The deduction is on the Schedule C not the Schedule A.
25
Mr. and Mrs. X have an AGI of $150,000. They have 3 children under 13. How much dependent care credit can they take if it costs $10,000 in dependent care for both of them to work?
A. $0
B. $1,200
C. $3,000
D. $6,000
Answer: B $1,200
Dependent care expenses are limited to $6,000 for 2 or more children. The credit percentage that applies is 20%. They have to be under age 13.
26
Steve owns and operates a large group of retail appliance stores. The store has an extensive selection of appliances for sale. He uses LIFO. He also repairs appliances both under warranty and out of warranty. What method of tax accounting is most appropriate for Steve's business?
A. Cash
B. Accrual
C. Hybrid
D. FIFO
Answer: C Hybrid
They hybrid method combines the accrual method for purchases and sales of inventory with the cash method for all other transactions. “Large group” implies over $25M of revenue.
27
Henry bought a beachfront condo for $200,000. He paid an attorney $1,000 to read and review legal documents associated with the condo. He also paid $12,000 for kitchen improvements. During the year repairs totaled $2,000 and property taxes $4,000. He claimed $7,280 for first year cost recovery deductions. What is the adjusted basis of the condo?
A. $192,720
B. $199,720
C. $205,720
D. $213,000
Answer: C $205,720
Cost $200,000
plus legal fees +1,000
plus improvements +12,000
less CRD -7,280
$205,720
Olivia Celeste Leporace F**ks Ian Shore but not really really normally
* Original basis: ADD commissions, legal fees, freight, improvement (capitalized) , sales tax
* NOT: DONT DO ANYTHING: repairs (always deducted), real estate taxes, normal business operating expenses
28
Sam owns a small duplex that he rents out. The duplex generated $12,000 of losses. His
earnings from his regular job were $150,000 and his investment income was $22,000. What is his AGI?
A. $138,000
B. $150,000
C. $160,000
D. $172,000
Answer: D. $172,000
His AGI is above $150,000 ($150,000 + 22,000 = $172,000). The loss can only be taken if his AGI was under $150,000. (Max would've been 25k too)
29
Larry bought a limited partnership interest in a low-income housing development. He is in a
35% income tax bracket. If the development generated a deduction-equivalent tax credit of
$20,000, how much of a tax credit can he use?
A. $0, limited partnerships cannot take losses
B. $3,000
C. $3,500
D. $7,000
E. $20,000
Answer: D $7,000
Multiply $20,000 times 35% to get the credit.
30
Paul Williams invested in an oil and gas working interest as a limited partner. The oil and gas
program produced a $30,000 loss. How much of the loss can he take this year?
A. $0
B. $25,000
C. 50% of $30,000
D. $30,000
Answer: A, $0
If he is a limited partner, he cannot take the loss. The loss becomes a passive loss subject to the passive loss rules.
31
Do separate maintenance agreements (pre-2019) qualify as a tax deduction for a payor spouse?
A. No, they are income to the payor spouse
B. No, it must be alimony
C. Yes, they are deductible
D. Not enough information to answer the question
C. Yes, they are deductible
The law reads "alimony and separate maintenance payments are deductible."
32
David and Sally are divorcing. Their two children will live with Sally. She will have custody. He will pay alimony and 100% of the support for the two children. Who will get the dependency exemption?
A. Sally
B. David
C. Sally for one child; David for one child
D. Neither
Answer: D, neither
Exemptions are eliminated starting in 2018.
33
Mrs. Peters (AGI $120,000) wants to gift a stock purchased this year for $75,000 now worth
$50,000 to the United Way. What is the amount of allowable charitable deduction she can
receive in the current year?
A. $36,000
B. $50,000
C. $60,000
D. $75,000
B. $50,000
Loss property is limited to FMV, but FMV is treated as basis. The maximum is 50% of AGI, but limited by FMV.
34
If Sam and Lana itemize deductions using a Schedule A, how much margin interest expense can they deduct this year? (what are you looking for here)
First, determine what their investment income is
Dividends $5,000
CD Interest (2% of $50,000) 1,000
Net Capital Gains 20,000 (short-term)
$26,000
The dividends are non-qualified and taxed as ordinary income. Short-term Capital Gains must be netted against the Long-term Capital Losses. Municipal bond interest can never be used.
35
How much self-employment income (Schedule C net income) will Sam have this year, based on Sam's estimations in the case data? (what do you generally do?)
Schedule C Gross Receipts ($100,000)
-BR Expenses (20,000)
=Schedule C Net Income ($80,000)
36
How much self-employment tax will Sam have to pay this year? (what do you generally do?)
Schedule C net income x .1413
37
Based on the case data, should Sam change his business entity? (what are you generally looking for?)
Age limit?
Profitable?
Risky? (needs limited liability?)
taxation?
38
Calculating AGI for:
- self employed
- spouse on social security
- contributes to their SEP
CD Interest $1,000.00
+ Dividends 5,000.00
+Schedule C Net Income 80,000.00
+ Net Capital Gains 20,000.00
($25,000 STCG - $5,000 LTCL)
+85% of Lana’s Social Security Benefits 9,180.00
Less one-half of Self-Employment Tax -5,652.00
Less Self-employed Health Insurance -7,100.00*
Less SEP -9,695.00 (given)
AGI $92,733.00
*The hardest part of this question is the self-employed health insurance. Income tax law says a selfemployed individual can deduct as a business expense 100% of the amount paid during the tax year for medical insurance on himself and spouse. The Medicare supplement is insurance, and the LTC is insurance. Amounts paid as voluntary premiums under Part B of Medicare are deductible as medical care on the
Schedule A. There is no answer using $780 x 2. Part B of Medicare is deductible on the Schedule A is subject to 7½% of AGI, not on the front of the Schedule 1040. Medicare supplements ($1,500 + $1,600) + long-term care ($1,500 + $2,500) = $7,100. Degree of difficulty is nasty.
39
Sam is considering buying a new computer to make his business dealings simpler. If the computer costs $8,000, what do you suggest?
The present value of money is worth more than a future deduction. Under current law, he can deduct the entire cost of the computer and avoid the burden of maintaining an MACRS depreciation schedule
40
should he take losses? what are you looking for?
are there STCG of ordinary income to offset losses?
would that eliminate taking deductible margin interest?
41
If Sam surrenders the variable universal life policy, what will be the tax result?
All life insurance gains upon surrender are considered ordinary income.
42
If Sam annuitizes his annuity, his insurance carrier indicated Sam could get $2,800 life payout with a 10-year certain feature. The life insurance company used a life expectancy of eighteen years. How much of the monthly payment would be excludable from ordinary income taxes?
calculate the exclusion ratio
x the exclusion calculation by payment
x 12 x life expectancy
43
hobby losses
not deducitable after 2017
44
A client had a tax LIABILITY last year of $100k. What is the required annual minimum annual tax payment to avoid an underpayment penalty tax?
90% of this year's tax
45
if you employ someone to care for your children or a disabled sibling, which tax schedule below would you recommend that your client file?
schedule H- household employees
46
if a client wants to adopt a foreign child, what would you recommend the client do first?
hire an immigration attorney
47
Which expenses qualify for the adoption credit?
court costs
attorney fees
cost of going aboard to adopt a foreign child
NOT: adopting spouse or using surrogate
48
what can be used as either an itemized deduction or a tax credit?
foreign tax credit
49
**Mr Pate owns an expensive rental home (FMV $600k). He has taken depreciation on the Home of $100k. He originally paid $300k for it. He has agreed to exchange it for a parcel of land worth $500k. He plans to develop the land.
What will be the adjusted basis after the exchange?
$200,000
His adjusted basis before the exchange was $200k ($300-100). There was no boot exchange! His basis after the exchange is unchanged (no recognized gain)
50
Harry is a 20% owner of an apartment building. His active income is $100k. His portfolio income is $80k. The building generated $15,000 of losses. Which is true?
A. He can deduct the losses in full
B. He can only deduct the losses against active income.
C. He can only deduct the losses against portfolio income
D. He cannot deduct the losses
D. He cannot deduct the losses
His AGI phaseout (150k) for active participation losses
51
low income housing credit and losses
still get the credit
52
paying too much for alimony
when there is no alimony paid in the third year, subtract $37,500 from the total alimony paid in both years 1 and 2.
(year 1 + year 2) - 37,500= recapture
53
a work of art created by the taxpayer is valued at
basis
54
schedule c write offs?
travel- 100%
meals- 50%
entertainment- 0%
of 10k
55
cash vs accrual vs hybrd
accrual- inventory! dept store, oer 25 mil
cash- trust, CPA firm
56
reducing taxes in an inflationary period
LIFO
57
DB salary cap is _____ and benefit cap is _______
305k
245k
58
unit benefit formula
percentage of earnings per year of service formula
59
who assumes pre-retirement inflation risk for DB?
employer
60
replacement ratio
life annuity x years of service x income
61
do investment returns affect money purchase plan account balances or contributions?
balances
62
what can't be integrated with social security?
Simple, ESOPs
63
contributions are to ______ as deferrals are to _______
employers
employees
64
if the plan has deferral listed....
that's how much you can defer! don't overthink it!
65
If you make 466k
your income for SIMPLE IRA would be 466
but simple 401k would be 305k
66
standalone and not aggregated.....
457b
67
UBTI
limited partnership
68
only _____ can hold 2nd to die insurance
profit sharing plans
pension plans can't
69
can qualified plans hold disability insurance?
yes
70
section 162
premiums are taxable to employee (phantom income)
but benefits are tax free!
71
unfunded
employer assets
employer can take deduction when employee recognizes income
72
who generally can control the pension plan when owner dies
hubby!
73
penality to late distribution
50%
74
penalty to late distribution
50%
75
Tom and Sally Johnson plan to retire in 20 years. They feel they need $80,000 at the beginning of each year in income in today's dollars. They feel they can make 7% after tax on their investments and inflation will be 3%. What is the lump sum needed at the beginning of retirement if they expect to live 25 years after retiring?
$2,374,004 ± $10
Step 1: Inflate 80,000 ± PV at 3% for 20 years. In their first year of retirement, they need
$144,488.
Step 2: $144,488 PMT, (1.07 + 1.03) - 1, x 100 = 3.8835i, 25 years = $2,374,004 (Begin)
76
Mr. and Mrs. Tea now have $1,000,000 in retirement savings. If they can earn an average of 7.5% on the account, what kind of income can they expect at the beginning of each year if they retire now and completely use up 100% of income and principal over the next 25 years?
A. $83,452 ± $1
Answer: A
Solve for payment (begin)
$1,000,000 ± PV
7.5 i
25N
77
pension max definition
Electing a single life annuity and using part of the higher monthly benefit to purchase life
insurance on the employee's life.
Getting the maximum payment out of the plan without leaving your
spouse with anything from the pension.
78
Who is eligible for the lump-sum death benefit under Social Security?
A. A dependent mother.
B. A son or daughter.
C. A spouse who was living in the same household.
D. A dependent family member.
C. A spouse who was living in the same household
A dependent child is the only other correct answer.
79
A solo 401(k) will allow which of the following contributions?
I. Elective deferrals
II. Employer contributions
III. Forfeitures
IV. Catch-up (age 50 or older)
NOT 3
80
Jack works for ABC, Inc. If ABC defined benefits plan provides for a life annuity equal to 1.5% of earnings per year up to 30 years of service, how much will Jack get with an average annual compensation of $100,000 received as an annual pension after 20 years?
A. $30,000
1.5% x 20 years = 30%
$100,000 x 30% = $30,000
81
In a defined benefit plan, which factor does not affect the amount of employer contributions?
A. Participant’s proximity to retirement age
B. Forfeiture
C. Salaries of key employees that exceed the salary cap
D. Investment return assumptions
C. Salaries of key employees that exceed the salary cap
82
Which of the following is considered a slower vesting schedule?
A. 1-year cliff
B. 3-year cliff
C. 5-year cliff
D. 2 to 6-year graded
Answer: C
5-year cliff and 3 to 7-year graded are considered slower vesting schedules. A one-year cliff isn't
a vesting schedule; it is one year of eligibility.
83
What is the permitted disparity with an integrated money purchase plan if the based
contribution is 5%?
A. 5%
B. 5.7%
C. 10%
D. 11.4%
Answer: A
It is the lesser of the base (5%) or 5.7. The excess is 10%
84
Which of the following entities may not sponsor a 403(b) program? Which cannot do 457?
A. A church
B. A private school
C. A state college
D. A governmental employer
E. A hospital
403b is NOT gov agencies
457 is NOT churches
85
28. The one-time election out of substantially equal payments allows a participant to switch from?
A. Annuity to amortization method.
B. Annuity/amortization to RMD method.
C. Amortization to annuity method.
D. RMD to amortization method.
Answer: B
The one-time election allows participants to switch from the annuity to RMD method.
86
Sherry Patts will be 72 on June 30th. Her IRA has a value of $493,200 at the beginning of this
year. If she only takes a $9,000 distribution by April 1st of next year (for this year), what will be
the amount of her penalty based on the uniform table distribution period of 27.4?
$493,200/ 27.4 = $18,000
$18,000 - $9,000 = $9,000 shortfall so $4,500 penalty. The penalty is 50% on the amount by
which a distribution in a given year falls short of the minimum required distribution.
87
In a Rabbi Trust (Nonqualified Deferred Compensation), the participant has the same rights as?
A. A secured creditor.
B. An unsecured creditor.
C. Any other employee.
D. Any other officer of the company.
Answer: B. An unsecured creditor.
The participant must not have greater rights than unsecured creditors
88
Kyle Adamson receives 1,000 ISOs to purchase AAA Corporation stock at $50 per share. Within two years of the grant dates, he exercises them when the stock is $100 per share. No AMT is due. Several years later, he sells 1,000 shares of AAA for $200 per share. Which of the following
are true?
I. There was a taxable event on the grant of the options of $50,000.
II. He will have a long-term capital gain of $150,000 when he sells the stock.
III. The bargain element (an AMT preference item) is $50 per share.
IV. He will have a long-term capital gain of $200,000 when he sells the stock.
Answer: B II, III
The gain (long-term) at the time of sale is $150 ($200 - $50). The bargain element is $50 ($100 -$50).
89
Art Klein died at age 69. His wife, patsy, is age 60. She has worked for the railroad company for 35 years and will be eligible for RR benefits of aprox $2k per month. Art has been receiving SS benefits of $800 per month. What benefit is Patsy eligible for now?
Surviving spouse railroad employees cannot get a social security widow's bbenefit and revive rail road retirement benefits.
She would get a $255 lump sum benefit
90
owner of a company and RMDs
you have to take them!!!! 5% owner rule
91
if you make 85k but not active participant, can you deduct IRA?
yes and don't overthink the AGI
92
Pedro is granted $250,000 of ISOs. This year he exercises $150,000 that vested. What will be the result of this exercies?
A company cannot grant more than $100,000 of ISOs (based on exercise price) that vest in the same year to any one employee if favorable ISO treatment is desired. If more than $100,000 of such ISOs that vest in the same year granted, the excess options, once exercised, are treated as NSOs (for tax purposes)
93
top heavy plan facts
can't be terminated, just subject to top heavy rules
can't exceed 60%
94
insurance and qualified plans
term 25%
ordinary 50%
DB 100%
95
401k hardship
deferrals + vested profit sharing contributions, not account balance
96
when you see income for 457
subtrack the contributions
97
Nonqualified deferred compensation using life insurance only works with a regular (C)
corporation because
the premiums are not deductible
98
Excess 25% minus maximum disparity 5.7% = 19.3%
yes lol
99
replacement cost case study
subtract the value of the building by land
look for business insurance policy and see what the coinsurance is
insurance you have/(replacement cost * co insurance)
* damage - deductible
100
Which of the following is a completed gift?
A. A donor gives the donee a personal check.
B. The gift is Causa Mortis.
C. The gift is beyond the donor's recall.
D. Creation of revocable bank account.
Answer: C. The gift is beyond the donor's recall
Answer A is not a completed gift. The transfer of a personal check is not complete until it is paid
by the drawee. Causa Mortis is a gift conditional upon the donor's dying. It is incomplete as
long as the donor is alive. In a revocable joint bank account, the donor retains the power to
revoke the gift.
101
Which of the following will be deductible from the gross estate to arrive at the adjusted gross
estate?
A. Property held by the entirety
B. A bequest of $100,000 to the decedent’s college
C. An unpaid federal gift tax of $20,000
D. Marital deduction property
Answer: C
The other answers are deductions from the adjusted gross estate (marital and charitable
deductions).
102
Which of the following is true about a dynasty trust?
I. It lasts for the lives being plus 21 years and 9 months or as long as local law allows.
II. It is a simple trust.
III. It benefits multiple future generations.
IV. It is a gift of a future interest.
A. All of the Above
B. I, II
C. I, III
D. II, III, IV
Answer: A
Because it is a simple trust, income only, it is a gift of a future interest.
103
Which of the following charitable transfers must pay out a specific amount of income (a sum
certain) each year (at least 5%)?
A. CLAT
B. Pooled Income Fund
C. Private Foundation
D. Charitable Gift Annuity
Answer: C Private Foundation
The other choices have no 5% requirement.
104
A wealth replacement trust is a (an)?
A. Estate Trust
B. Bypass Trust
C. Irrevocable Life Insurance Trust
D. Dynasty Trust
Answer: C
A wealth replacement trust is just a fancy name for an ILIT.
105
The main reason to do a SCIN over and installment sale is?
A. For the seller to pay more income tax while living.
B. For the seller to remove the balance of any payments due at a premature death from
his/her estate.
C. For the seller to receive a larger income stream (a premium) while living.
D. For the seller to remove and gain (taxable income) either prior to death or due to a
premature death.
Answer: B. For the seller to remove the balance of any payments due at a premature death from
his/her estate.
Although Answer C is true, the main reason for doing the SCIN is to remove the asset from the
estate due to a premature death. Answer A is true, but it is a disadvantage.
106
How much ln gifts could a client and spouse give away using the annual exclusion ($16,000) to 8 family members if the IRS allowed for a 50% valuation discount using a FLP?
A. $256,000
B. $512,000
C. $1,024,000
D. $2,048,000
Answer: B
$16,000/50% = $32,000
$32,000 x 2 (client & spouse) x 8 (members) = $512,000
107
When is a reversionary interest tainted for income tax purposes?
A. Never, the interest is only tainted for estate tax purposes.
B. When the interest exceeds 5% of the trust value at the time of creation.
C. When the interest exceeds basis.
D. When the client has the right to use or enjoy the trust property.
B. When the interest exceeds 5% of the trust value at the time of creation.
108
Barb and sue are sisters. each owns 50% of 10 acres of land worth $500,000 in tenancy in common. What dollar value is shown on Sue's financial statement for this asset?
$250,000
109
What is the first consideration you should discuss with a client who wants to gift property to various family members?
if the client can afford the gift
110
which of the following transfers will produce a taxable gift?
A. A $16k payment to a granddaughter for college tuition
B. A gift of a car worth $32k to a friend
C. A gift of $100k to the president
D. A payment of $16k to a son for a grandaughter's medical bills
B. A gift of a car worth $32k to a friend
111
A husband creates a revocable living trust. He has made a bank the trustee. His assets include bonds, stocks, a mutual funds, an installment sale note, and his personal residence. Which of the following is true?
A. He must recongnize the gain on the installment sale at the time of transfer
B. He will lose his $500k exemption on the sale of his home.
C. The bonds will be better managed because the trustee will be reviewing them
D. The LTCG trust assets will step up in basis at his death
D. The LTCG trust assets will step up in basis at his death
112
Johnny sets up an irrevocable trust for his mother. She is the only beneficiary. The trust provides that his mother will receive $1000 of monthly income. The annual trust income is approximately $16,000. Johnny is the remainder beneficiary at this mother's death. To whom is the trust income taxable?
Johnny
At his mother's death, the assets revert back to Johnny. It is also tainted for estate tax.
113
estate planning strategy for married couple's to minimize taxes over 2 deaths
Bequeath as much as practical to a bypass trust to take advantage of the exemption amount at first death
114
Which of the following trusts cannot qualify for the marital deduction?
A. Power of appointment trust
B. Bypass trust
C. QDT Trust
D. QTIP Trust
B. Bypass trust
115
If a 250C trust has over $13,450 in taxable income, what is the tax rate?
37%
116
Dad is setting up educational trusts for this minor children. Which type of trust should he consider if he is concerned that they may not attend college?
Crummey trust is a gift of present interest but does not have to terminate at 21.
With the 2503C trust, children's get corpus at 32. A 2503b trust is general not a minor trust. Both the Crummey and the irrevocable trusts are possible answers. These two trusts can continue indefinitely . The irrevocable trust is a gift of future interest.
117
if the question lists a specific charity in mind
CRAT or pooled income
118
FLP discount
gift/discount%
119
taxable terminitation
passes property to grandwhilcren only after son's interest ends
120
IRD
insurance renewal commissions
taxable distributions from a qualified employee plan
partnership income of deeased partner
121
which of the following statements about 2032A is not true?
A. the property must have been help for 'qualified use' and actively managed by the decedent or the decedent's family for 5 out of the 8 years prior to the decedent's death
B. The qualifying property must pass to a qualifying heir and must continue in qualified use for at least 10 years after the decedent's death
C. The value of the farm or business must be more than 35% of the adjusted gross estate
C. The value of the farm or business must be more than 35% of the adjusted gross estate
A 2032A election requires that the closely help business, ranch, or farm comparise 50% of the decendent's gross estate and the real property 25%. 35% is for the 303 and 6166
122
6166 election
pay federal taxes in installments
123
gifting life insurance with future premiums?
interpolated terminal reserve
124
does life insurance get step up?
yes
125
exercised in favor of the holder's children only (NOT in favor of holder or the financial equivalent of the holder)
special power
126
when u have a bene......
no probate!
127
medicaid
$2,000 in assets/ 5 year look back
128
T/F: a gift at death is included in gross estate regardless
TRUE!
129
the bad boy must get income!
2503B trust
130
gifts in trusts lacking Crummy provisions
future interest gifts and not eligible for gift tax deduction
131
discounted gifts
only get discount for gift value, not basis
132
phantom income in estate
private annuity
133
is the annual exclusion available at death?
no!
134
widow and sec 121 house
2 years and under= 500k
2 year plus= 250k
135
gifting strategies never included in the gross estate
SCIN
gift leaseback
QPRT and GRAT: if donor outlives
136
second marriage?
first marriage?
second marriage= C trust=first spouse to die controls= QTIP, current interest trust= income to spouse for live but ultimately decides who the money goes to
first marriage= B trust= 1st spouse to dies controls= bypass, credit shelter, family= income can be split amongst spouse and other individuals
