1. Which of the following items an individual owned at the time of his death will be included in his gross estate for federal estate tax purposes:
A. Real estate in Atlantic City valued at $200,000 where the decedent had a right to live rent free for life. The property had been given to the decedent by his father for his life, after which it was to pass to his son under the terms of his father’s will.
B. $160,000 par value of municipal bonds due the year after the decedent’s death
C.10 acres of undeveloped land in Arizona owned by the decedent and his two brothers as tenants in common.
D. IBM stock valued at $30,000 owned by the decedent individually.
E. Proceeds of a wrongful death claim brought by the decedent’s personal representative after his death in an automobile accident.
F. $5,000 in dividends declared and of record but not paid at the time of the decedent’s death
G. A claim for damages arising from a car accident in which the decedent was involved prior to his death
H. Commission income that the decedent had earned for the month prior to his death but that had not yet been paid to him
I. A Matisse painting hanging in his home
J. Property in a trust established by his brother for the benefit of his brother’s son of which the decedent was the sole trustee. The property in the trust is valued at $50,000.
a) A,B,C,E,H and J.
b) B, Part of C, D, F, G, H and possibly I
c) A,B,C,D,G,H and possibly I and J.
d) A,B,C,D,E, F, G, H, I, J
2. John Jamison transferred $200,000 of tax exempt bonds to a trust for the benefit of his grandchildren 2 years ago. He died this year. Assume the gift tax paid was approximately $60,000. What amount is includible in his gross estate. If the transfer was made to his spouse what amount would be includible in his gross estate?
a) The $60,000 gift tax; however, nothing would have been includible if he had transferred the bonds to his spouse as no gift tax would be due.
b) The $200,000 in tax exempt bonds less the $60,000 gift tax; however, nothing would have been includible if he had transferred the bonds to his spouse as no gift tax would be due.
c) The $200,000 in tax exempt bonds less the $60,000 gift tax; however, nothing would have been includible if he had transferred the bonds to his spouse $200,000 in tax exempt bonds less the $60,000 gift tax would be due.
d) The $60,000 gift tax; however, nothing would have been includible if he had transferred the bonds to his spouse the $60,000 gift tax would be due.
3.Under which of the following conditions and to what extent are benefits from a qualified retirement plan included in a decedent’s gross estate?
a) The benefits are included in the gross estate.
b) The benefits are included in the gross estate unless a non-employee spouse’s interest in plan proceeds arising solely because of the application of community property laws is completely excluded from his or her estate if the non-employee-spouse predeceases the plan participant or plan proceeds were in pay status on December 31, 1984 and prior to the enactment of the Deficit Reduction Act of 1984, the participant had irrevocably elected a beneficiary designation that would have qualified the plan proceeds for estate tax exclusion.
c) The benefits are never included in the gross estate because spousal interests are not subject to estate tax unless a non-employee spouse’s interest in plan proceeds arising solely because of the application of community property laws is completely excluded from his or her estate if the non- employee-spouse predeceases the plan participant or plan proceeds were not in pay status on December 31, 1984 and prior to the enactment of the Deficit Reduction Act of 1984, the participant had irrevocably elected a beneficiary designation that would have qualified the plan proceeds for estate tax exclusion.
d) All of the above