CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES

2184. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #81
Lila is the owner and beneficiary of a policy on the life of her husband, Austin. Upon Austin’s prior death, the insurance proceeds paid to Lila do not qualify for the marital deduction.

a. True
b. False

2185. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #82
To avoid the terminable interest limitation on the marital deduction, the surviving spouse must be granted a general power of appointment over the trust property, and a QTIP election must be made.

a. True
b. False

2186. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #83
By his will, all of Rusty’s property passes outright to his wife, Patsy. As Patsy was not given a general power of appointment or Rusty’s executor did not make a QTIP election, Rusty’s estate is not allowed a marital deduction.

a. True
b. False

2187. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #84
In the case of a transfer by gift, a QTIP election causes the property to be subject to the estate tax upon the death of the donee spouse.

a. True
b. False

2188. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #85

A marital deduction can be allowed even if the surviving spouse is a nonresident alien.

a. True
b. False

2189. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #86
The current top Federal transfer tax rate of 35% is the highest that the rate ever has been.

a. True
b. False

2190. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #87
The current Federal transfer tax rate of 35% is as low as any top rate that ever has been imposed.

a. True
b. False

2191. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #88
The current $5 million exemption equivalent applies to both the Federal estate and gift taxes.

a. True
b. False

2192. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #89
The current $5 million exemption equivalent is not permanent but is scheduled to expire after 2012.

a. True
b. False

2193. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #90

Since the credit for state death taxes paid (under § 2011) has been eliminated, no tax relief is available to an estate that is subject to both Federal and state death taxes.

a. True
b. False

2194. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #91
Sidney dies and leaves property to his sister Giselle. Thirty months later, Giselle dies. Under § 2013 (credit for tax on prior transfers), Giselle’s estate can claim a full credit for any Federal estate taxes paid by Sidney’s estate as to amounts passing to Giselle.

a. True
b. False

2195. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #92
In 2000, Katelyn inherited considerable property when her father died. When Katelyn dies in 2011, her estate may be able to use § 2013 (credit for tax on prior transfers) as to some of the estate taxes paid by her father’s estate.

a. True
b. False

2196. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #93
At the time of Dylan’s death, he was a resident of Newark. He owns land located in a foreign country, which is subject to that country’s death tax. This same land also can be subject to the Federal estate tax.

a. True
b. False

2197. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #94
The U.S. has death tax conventions (i.e., treaties) with most of the countries of the world.

a. True
b. False

2198. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #95
Eric dies at age 96 and is survived by his third wife, Monique (age 22), and a granddaughter, Paula (age 50). Eric’s will divides his $11 million estate between these two survivors. Both of these transfers are subject to the generation skipping transfer tax (GSTT).

a. True
b. False

2199. CHAPTER 18—THE FEDERAL GIFT AND ESTATE TAXES Question TF #96
Peggy gives $200,000 to her grandson. This is an example of a direct skip for purposes of the GSTT (generation-skipping transfer tax).

a. True
b. False