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American College Fundamentals of Estate Planning test Sample Questions:

1. Which of the following is (are) a permissible deduction from a decedent's gross estate to determine the decedent's adjusted gross estate?
1.Expenses incurred for the benefit of individual heirs.
2.Expenses incurred in the collection of estate assets.

A) 1 only
B) Both 1 and 2
C) 2 only
D) Neither 1 nor 2

2. Which of the following statements concerning both the joint tenancy with right of survivorship and the tenancy by the entirety forms of real property ownership is correct?

A) Both forms of ownership provide that a deceased owner's interest passes to the surviving owner.
B) Both forms of ownership are restricted to two equal owners at any one time.
C) Both forms of ownership are restricted to husband and wife.
D) Both forms of ownership provide that an owner can sell his interest in the property at any time without destroying the form of ownership.

3. Which of the following statements concerning the so-called "kiddie-tax" on unearned income of children under age 14 is (are) correct?
1.The rules apply to earned income of the children.
2.The rules apply to trust income received by a child under age 14 only if the trust was established by the child's parents.

A) 1 only
B) Both 1 and 2
C) 2 only
D) Neither 1 nor 2

4. Which of the following statements concerning the imposition of state death taxes on property owned by a decedent is (are) correct?
1.Real estate must be taxed in the state where the decedent was domiciled.
2.Intangible personal property is generally taxed in the state where the decedent was domiciled.

A) 1 only
B) Both 1 and 2
C) 2 only
D) Neither 1 nor 2

5. All the following statements concerning the generation-skipping transfer tax (GSTT) are correct EXCEPT:

A) The liability for GSTT falls upon thedonee regardless of the type of transfer.
B) Tuition payments made by a grandparent directly to a university for a grandchild's education are exempt from GSTT.
C) Direct skip gifts by a grandparent of up to $11,000 can be made to each grandchild without GSTT liability due to an annual exclusion.
D) Each individual has an aggregate $1.5 million exemption against GSTT.

Solutions: