Wrong Answer estate

Question 1

Powers That cannot be given to another

Answer 1

Power to execute or revoke a will

Power to execute a living will (right to die)

Question 2

Key Elements of Form 706

Answer 2

Gross Estate
(Less funeral expenses, administration expenses, debts, taxes, and casualty loss)

Adjusted Gross Estate
(Less maritable and charitable deduction)

Taxable Estate
(Plus any adjusted taxable gifts “amounts exceeding gift tax exclusion”)

Tax Base
(Less estate tax deduction 13,610,000 for 2024)

Tentative Tax
(Less gift taxes paid)

Net estate tax

Question 3

Private Foundation

Answer 3

Charitable organization created, funded and usually controlled by a single wealthy donor or by members of donors family. Lower annual contribution deduction percentage limitations apply for income tax purposes.

An excise tax is generally levied on a private foundation that fails to distribute at least 5% of its investment assets annually.

Question 4

Recapitalization

Answer 4

Freezes the assets in the estate

Question 5

Key Person Discount

Answer 5

A key person discount may be allowed for a business that lost a key employee who was responsible for its goodwill or administrative or management skills

Question 6

Income with Respect to Decedent (IRD)

Answer 6

Estate tax is due but estate is allowed an income tax deduction for the estate taxes attributable to the fee collected

Question 7

QDOT

Answer 7

Qualifies the estate for the martial deduction if passing to a non citizen spouse

Question 8

QDOT

Answer 8

Qualifies the estate for the martial deduction if passing to a non citizen spouse

Question 9

First consideration when discussing gifting property with a client

Answer 9

If a client can afford to gift

Question 10

Estate Tax form

Answer 10

Form 706

Question 11

When is tax form 709 filed

Answer 11

-When taxable gifts exceed the annual exclusion.
-a gift of a future interest in any amount
-a gift for which spouses elect gift splitting

Question 12

Basis when gifting to a trust

Answer 12

Still remains, it doesn’t lose basis.

Question 13

2503 (c) trust

Answer 13

Enables a grantor to make a gift to a minor and still obtain the annual gift tax exclusion:

-can be funded with any type of asset
-Normally distributed at age 21
-costs to set up and maintain (legal and accounting)
-can be included in grantor/trustees estate