ACCT 424 Week 6 Checkpoint

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ACCT 424 Week 6 Checkpoint

1. (TCO 9) During 2011, John gave cash gifts of $20,000 to Anne (his daughter) and $4,000 to Mike (his brother). Which would be his annual exclusion for Anne and Mike? (Points : 2)

$12,000 for Anne and $4,000 for Mike
$13,000 for Anne and $4,000 for Mike
$20,000 for Anne and 4,000 for Mike
$13,000 for Anne and 13,000 for Mike

 

2. (TCO 9) Maude died during 2011, leaving an estate valued at $4,200,000 at her date of death. The estate had land valued at $3,000,000 and dividends valued at $1,200,000. At the 6-month alternate valuation date, the estate had a value of $4,800,000 with the land valued at $4,000,000 and the dividends valued at $800,000. Which statement is correct about Maude’s estate? (Points : 2)

Maude’s estate should elect the alternate valuation date with the estate value of $4,800,000.
Maude’s estate should not elect the alternate valuation date, and the estate value will be $4,200,000.
Maude’s estate should value the land at the date of death of $3,000,000 and elect the alternate valuation for the dividends of $800,000 so the total estate value would be $3,800,000.
Maude’s estate should value the dividends at the date of death of $1,200,000 and elect the alternate valuation for the land of $4,000,000 so that total estate value would be $5,200,000.

 

3. (TCO 9) Donald and Frank (who are not related) acquired land as tenants with right of survivorship. Donald contributed $300,000, whereas Frank contributed $100,000 of the $400,000 purchase price. How much must be included in Donald’s gross estate if he were to die in 2011 when the land was valued at $1,200,000? (Points : 2)

$1,200,000
$300,000
$900,000
$400,000

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4. (TCO 9) The unified transfer tax was created to (Points : 2)

distinguish estate from inheritance taxes.
limit lifetime transfers of wealth.
increase transfers of wealth through gifts rather than at death.
cover all gratuitous transfers with consistent rates.

 

5. (TCO 9) Which is a true statement? (Points : 2)

The tax base for determining the estate tax is the taxable estate plus all post-1976 taxable gifts.
The tax base for determining the estate tax is the taxable estate less all pre-1976 taxable gifts.
All marital transfers are not taxable due to income filing status.
State and local death taxes are not deductible.

 

6. (TCO 9) Joe makes a gift of assets with a fair market value of $400,000 to his sister in 2009. He has made annual gifts of $50,000 cash for this and the last 4 years (total 5 years) to her as well as his brother, and he paid the applicable gift tax on these annual gifts. Presuming no other taxable gifts and before applying the unified tax credit, which is the amount of the total of current and past taxable gifts? (Points : 2)

$770,000
$874,000
$774,000
$474,000

 

7. (TCO 9) Susan makes a gift of assets with a fair market value of $750,000 to her daughter in 2011. She has made annual gifts of $20,000 cash in this and the last 6 years (total 7 years) to her daughter as well as her two sons, and she paid the applicable gift tax on these annual gifts. Presuming no other taxable gifts and before applying the unified tax credit, which is the amount of the total of current and past taxable gifts? (Points : 2)

$771,000
$923,000
$990,000
$912,000

 

8. (TCO 9) How much is subject to the annual exclusion limits of gifts made to any one person during any calendar year in determining the total amount of gifts for the year? (Points : 2)

$12,000
$11,000
$13,000
$7500

 

9. (TCO 9) John dies and his estate receives a distribution from his employer’s qualified pension plan of $2 million dollars, consisting of John’s contributions of $500,000, his employer’s contributions of $750,000, and profits earned by the plan of $750,000. John’s estate also receives $300,000 of term life insurance that John’s employer maintained for John. How much should be included in John’s gross estate? (Points : 2)

$2,000,000
$2,300,000
$1,250,000
$1,550,000

 

10. (TCO 9) In calculating the taxable estate, which is not allowed as a deduction? (Points : 2)

Charitable transfers
State death taxes
Marital deduction
None of the above

 

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