Gifting as a Tax Strategy (Third Edition) (87110)

This course will give you an overview of how to use the gift tax and other exclusions to
minimize estate taxes for beneficiaries.
Final Exam > Results Page

final exam score:

final exam status:

100%

Question 1

Correct

All of the following are tax benefits of gifting except:

(You Answered) (Correct Answer) Transfers made in 2011 are subject to lower tax rates if made by gift than if made by inheritance.

Future appreciation is removed from the donor's estate.

Funds used to pay gift taxes are removed from the donor's estate.

Eliminating the value of the property from the donor's estate.

Question 2

Correct

All of the following are true statements about the annual gift tax exclusion except:

There is no limit on the number of donees for which it can be used each year.

The exclusion is figured on a calendar year basis.

(You Answered) (Correct Answer) The exclusion applies only to gifts to relatives.

Annual gift exclusion is “use it or lose it” proposition.

Question 3

Correct

In 2011, a donor makes a contribution to his son’s Section 529 education savings plan, and makes the “5-year election” to treat the gift as having been made ratably over 5 years. How much can the donor contribute to the plan without making a taxable gift?

$13,000

$50,000

(You Answered) (Correct Answer) $65,000

$75,000

Question 4

Correct

Which of the following statements about the gift tax exemption amount is true?

(You Answered) (Correct Answer) The amount of gift tax exemption used during a person’s lifetime reduces the estate tax exemption amount which is available at the person’s death.

The exemption amount is $1 million in 2011.

The exemption amount is $2 million in 2012.

The exemption amount was $3.5 million in 2010.

Question 5

Correct

With respect to the exclusion for direct payments of medical or educational expenses, all of the following statements are true except:

(You Answered) (Correct Answer) A donor can claim either the annual gift tax exclusion or the medical/educational exclusion for the benefit of the same donee.

There is no dollar limit on the medical/educational exclusion.

'Educational expenses' includes only tuition costs and not room and board.

A donor can make unlimited payments of medical payments or educational expenses.

Question 6

Correct

With respect to the gift tax marital deduction, all of the following statements are true except:

Gifts to non-U.S. citizen spouses are limited in 2011 to present interest gifts up to $136,000.

(You Answered) (Correct Answer) Gifts to U.S. citizen spouses are limited to the lifetime exemption amount.

Gifts to a spouse do not have to be reported on a gift tax return unless they are gifts of terminable interest property, gifts of future interests where someone else is given the present interest, or gifts to a non-U.S. citizen spouse.

Gifts of “Qualified Terminable Interest Property” (QTIP) to U.S. citizen spouse donee make available unlimited marital deduction to a donor.

Question 7

Correct

With respect to the gift tax charitable deduction, all of the following statements are true except:

(You Answered) (Correct Answer) The extent of the deduction depends on the donor's adjusted gross income.

Gifts to foreign charities may qualify for the deduction.

Gifts that are fully tax free are not reported on the gift tax return unless the donor has also made reportable gifts to a non-charitable beneficiary.

There is an unlimited deduction for gifts to charity.

Question 8

Correct

In 2011 and 2012, the top gift and estate tax rate is:

15%

25%

(You Answered) (Correct Answer) 35%

50%

55%

Question 9

Correct

With respect to examining gift tax returns, which of the following statements is true?

Generally, the IRS has three years in which to examine a gift tax return and challenge valuations claimed on the return.

After three years have passed, valuation claimed on a gift tax return cannot be challenged if there is adequate disclosure on the return.

The ban on revisiting valuations on closed gift tax returns applies only to gifts made after August 5, 1997 that were properly reported on a gift tax return.

(You Answered) (Correct Answer) All of the above

Question 10

Correct

Under the Tax Relief Act of 2010, the estate tax exclusion amount for 2011 and 2012 is

$750,000

$1,000,000

$3,500,000

(You Answered) (Correct Answer) $5,000,000