1. Harold and Mary are married and live in a community property state. During the marriage Harold bought a parcel of real estate for $100,000 in community funds and titled the property in his name alone. Mary died on January 30th of this year and was survived by Harold who did not remarry. The parcel of real property was worth $250,000 on January 30th of this year but was only worth $220,000 at year end. What amount, if any, is included in Mary's gross estate?
2. Alexis transferred $400,000 to a trust with directions to pay income to her spouse, William, for his life. After William's death the corpus of the trust will pass to William's son. If the life estate is valued at $72,000, what is the total amount of the taxable gifts?
3. At her death Serena owned real estate worth $210,000 with her spouse in joint tenancy with the right of survivorship. Serena contributed $50,000 to the original cost of the property and her spouse contributed the remaining $100,000. What amount, if any, is included in Serena's gross estate?
4. Natalie transferred $500,000 of bonds to a revocable trust with directions to the trustee to pay income to her aunt for five years after which the corpus is to be distributed to Natalie's niece. At year end, the trustee paid $15,000 of income to the aunt. Which of the following is a true statement?
5. At his death Trevor had a probate estate consisting of $4 million of property. Which of the following is a true statement about Trevor's estate or estate tax?
a. Trevor must have a taxable estate of at least $4 million.
b. Trevor must have an adjusted gross estate of at least $4 million.
c. Trevor must have an estate tax base (cumulative taxable transfers) of at least $4 million.
d. Trevor must have a gross estate of at least $4 million.
e. None of these is necessarily true.
6. A gratuitous transfer of property made during the lifetime of the donor is called?
7. At his death Stanley owned real estate worth $345,000 with two other individuals as equal tenants in common. Stanley contributed $50,000 to the $100,000 total cost of the property. What amount, if any, is included in Stanley's gross estate?
8. Madison was married at the time of her death and her gross estate consisted of $22 million in stock and bonds. Madison left all of her property to her spouse. What is the result?
a. Madison's taxable estate will be zero.
b. Madison's surviving spouse will have an income tax basis in the inherited property of zero.
c. Madison's adjusted gross estate will be zero.
d. Madison's estate will have a tentative estate tax of zero.
e. None of these.
9. Christian transferred $60,000 to an irrevocable trust for the benefit of his three daughters. The three daughters share income equally for five years and then the corpus of the trust is to be divided equally between them. What is the amount of the taxable gifts, if any, made by Christian?