1. Which of the following statements is or are false?
I. Louise, who died in 2015, was survived by her husband, Luis. Louise and Luis husband owned their home as tenants in common. The fair market value of the home on the date of Louise's death was $750,000. Louise provided all of the consideration for the purchase. The entire value of the property (on the date of Louise's death, or the alternate valuation date, whichever is applicable) is includible in Louise's gross estate for federal estate tax purposes.
II. Two brothers, Jeff and David, purchased a vacation home in 1982, as joint tenants with right of survivorship. Jeff contributed $40,000 toward the purchase price and David contributed $60,000. They have records of their contributions. In 2015, when the property was worth $200,000, Jeff died. With respect to the vacation home, $100,000 is includible in Jeff's gross estate for federal estate tax purposes.
III. By the terms of his will, John left his entire estate in trust. The terms of the trust provided that all trust income was to be paid to his wife (who survived him) for her life in at least annual installments. The terms of the trust also gave the trustee discretionary authority to distribute trust principal to his disabled daughter (who survived him) for her support. The trust meets the requirements of a qualified terminable interest property trust (QTIP Trust).
a. I only is false.
b. II only is false.
c. III only is false.
d. I and II are false.
e. I, II, and III are false.
2. Which of the following statements is or are true?
I. John and Mary owned a home as tenants by the entirety. The home was purchased in 1995 for $100,000. John contributed $70,000 toward the purchase price and Mary contributed $30,000. When John died in 2015, the home was worth $300,000. $210,000 will be included in John's gross estate for federal estate tax purposes as the value of his interest in the home.
II. Mark transferred the title to his home to his son, Richard, on January 10, 2011, but Mark retained a life estate in the home. Mark released (that is, relinquished) his life estate in favor of his son, Richard, on July 4, 2012. Mark also established a new residence before he died. Mark died on May 3, 2015. The value of the home as of the date of Mark's death (or the alternate valuation date, if applicable) is not includible in Mark's gross estate for federal estate tax purposes.
a. I only is true.
b. II only is true.
c. Both I and II are true.
d. Neither I nor II is true.