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Question 1

interest on installment note

Answer 1

deductible from BUYER income

Question 2

installment note at death

Answer 2

in SELLER gross estate

Question 3

GRAT

Answer 3

FUTURE interest gift

Question 4

community property

Answer 4

CA TX
WI WA
LA ID
AZ NV New Mexico

Question 5

retirement planning

Answer 5

at least 5 years prior to retirement

Question 6

loan from life insurance cash value

Answer 6

NO income tax at time of loan

Question 7

life insurance proceeds included in estate

Answer 7

incident of ownership

payable to estate

Question 8

residuary trust planning

Answer 8

1. exemption ($11.82)

2. marital deduction

Question 9

lump sum insurance

Answer 9

• burial, travel, bereavement
• 6/12 living expenses
• legacy plan. inheritance
• buy/sell

Question 10

gift to closely held business

Answer 10

future interest (no annual exclusion)

Question 11

charitable deduction on AGI

Answer 11

60% AGI

Question 12

Code of Ethics

Answer 12

integrity
objectivity
competence
fairness
confidentiality
professionalism

Question 13

312(I)

Answer 13

= savings program for employees not eligible to participate in State Retirement System

   - money-purchase
   - tandem
   - target benefit

Question 14

neoclassical economic theory

Answer 14

full info, utility max, rational preference

Question 15

S corp taxation

Answer 15

losses deductible by shareholder

Question 16

cross-purchase

Answer 16

premium: after tax $
buyer tax (income tax): basis = purchase price

Question 17

annual gift exclusions

Answer 17

NOT included in estate tax computation

Question 18

charitable adjustments

Answer 18

= deduction

1. business expense of business owner
2. loss of sale
3. alimony

Question 19

QTIP

Answer 19

DECEASED SPOUSE (1st to die) decides who remained beneficiary (remainder interest)

Question 20

private annuity

Answer 20

NO estate tax

Question 21

sprinkle trust

Answer 21

ONLY while alive

Question 22

living trust (intervivos) –> irrevocable

Answer 22

NOT probate avoidant

** living trust/ revocable (will) never avoids probate

Question 23

child resources before age of majority

Answer 23

INCLUDED in eligibility income tax

Question 24

legal and appraisal fees in divorce

Answer 24

NOT deductible for federal income tax

Question 25

parents income before 18 (minor)

Answer 25

INCLUDED in income limitation

Question 26

straw man

Answer 26

Intentionally misrepresented proposition/ no integrity

Question 27

ABLE

Answer 27

max contribution = adjusted ANNUALLY (for inflation)

asset allocation = adjust BIANNUALLY

Question 28

Medicaid resource test

Answer 28

cash value of life insurance vehicle

Question 29

property settlement in divorce

Answer 29

= DIVISION (not gift)

Question 30

installment note

Answer 30

= lock in value

1. regular
2. annuity
3. SCIN

Question 31

establish REVOCABLE

Answer 31

NOT completed gift

Question 32

inheritance

Answer 32

separate property in divorce

Question 33

capital gain exclusion

Answer 33

before two years and move for job = prorated

months/ 24 x 250

Question 34

fringe benefits (extra)

Answer 34

only C corp

Question 35

entity type

Answer 35

life insurance increases value of business –> increasing estate tax of owners