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Flashcards in Mod 39 Wrong Answers Deck (18):

If medical services were provided and paid for by the decedent's estate, what are 2 conditions for the expenses to be deducted on the final tax return?

1 executor attaches appropriate waiver and

2 medical expenses are paid within 1 year of decedent's death


If you gift a stock to your family member and they die and you receive the stock in one year of their death, what is your basis in the stock?
Bought stock = $1,000
Gifted stock = $2,000
Inherited stock back at $3,000

Original basis of $1,000


An estate is allowed a charitable deduction on an estate's fiduciary income tax return (Form 1041) if...2

1 decedent's will specifically provides for contribution

2 recipient is qualified charitable organization


Amount allowed as charitable deduction is not subject to any percentage limitations, but must be paid from amounts included in the estate's...

Gross income for year of contribution


When the grantor of a trust retains substantial control over the trust, such as power to revoke the income and remainder interests, the trust income will be taxed to...

Taxed to grantor (trust and beneficiaries won't be taxed)


Exempt status is specifically denied to organizations if a substantial part of their activities consists of...2

1 carrying on propaganda or

2 influencing legislation


Operating a grocery store almost fully staffed by emotionally handicapped people as part of a therapeutic program, to allow the persons to become involved in society, assume responsibility and exercise business judgment would be...

Substantially related to rehabilitation purposes of exempt


Retaining the power to revoke income interest or remainder interest means that...

The gift is not completed


Where are executor's fees deducted?

Either federal estate tax return (form 706) or

Fiduciary income tax return (form 1041)


If executor's fees are deducted on the fiduciary return they...

Cannot be deducted on the estate tax return


Generally property included in a decedent's gross estate will be eligible for unlimited marital deduction if...

The property passes to the decedent's surviving spouse


When the decedent owns the life insurance policy, in which the policy's proceeds are left to the decedent's spouse, the insurance proceeds are...2

1 included in the gross estate and

2 and are deductible as marital deduction to arrive at taxable estate


When remainder interest will pass to a family member after the expiration of 5 years, the gift of remainder interest is a...2

1 gift of future interest and

2 is not eligible for an annual exclusion


Gift of income interest out of a trust for $30,000/year is a gift of...2

1 present interest

2 it would be partially offset by annual exclusion of $14,000


If an irrevocable trust is created in which the relative will not begin receiving income until 5 years later, the gift of income interest to the relative is...

1 A gift of future interest and

2 cannot be offset by an annual exclusion


Future interest in the irrevocable trust is...

Fully taxable to the individual who set up the trust


Interest income from either a revocable or irrevocable trust received in the current year is...

Partially taxable, (taxable after $14,000 exclusion)


What is the due date for a gift tax return (form 709) (where the gifter is living)?

April 15th

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