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American College Fundamentals of Estate Planning test Sample Questions:
1. Which of the following statements concerning the inclusion in a decedent-employee's gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee's estate is (are) correct?
1.Lump-sum distributions of payments attributable to the employer's contributions are excluded from the gross estate.
2.Lump-sum distributions of payments attributable to the decedent-employee's contributions are excluded from the gross estate.
A) 2 only
B) Neither 1 nor 2
C) 1 only
D) Both 1 and 2
2. A widower dies leaving a net probate estate of $300,000. At the time of his death, his descendants are as follows:
A son, Joe, who has no children; A deceased daughter, Mary, whose two children, Irene and Sally, survive; and
A daughter, Anne, who has one child, Harry
Assuming that the widower's will provides for the distribution of his assets in equal shares to his children, per stirpes, which of the following correctly states the amounts each descendant will receive?
A) $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, and $100,000 to Anne
B) $100,000 to Joe, $50,000 to Irene, $50,000 to Sally, $50,000 to Anne, and $50,000 to Harry
C) $60,000 to Joe, $60,000 to Irene, $60,000 to Sally, $60,000 to Anne, and $60,000 to Harry
D) $75,000 to Joe, $75,000 to Irene, $75,000 to Sally, and $75,000 to Anne
3. A wife makes outright gifts of $66,000 this year to her son, and her husband agrees to split the gifts with her. Which of the following correctly states the amount of the taxable gifts?
A) Wife $32,000, husband $32,000
B) Wife $22,000, husband $22,000
C) Wife $12,000, husband $32,000
D) Wife $44,000, husband 0
4. All the following trust provisions avoid causing the inclusion of an irrevocable life insurance trust in an insured's gross estate EXCEPT
A) a trustee's power to loan assets to the estate at the trustee's discretion
B) a trust beneficiary's power to withdraw contributions to the trust
C) a trustee's power to pay estate expenses
D) a trustee's power to purchase assets from the estate at the trustee's discretion
5. Among the assets in a decedent's gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. The relevant facts concerning this estate are:
*Adjusted gross estate $1,600,000
*Fair market value of stock in the
*closely held corporation 700,000
*Funeral expenses 30,000
*Executor's commission 50,000
*Federal and state death tax 160,000
What amount of closely held corporate stock can be redeemed under IRC Section 303 so that the redemption will be treated as a sale or exchange rather than a dividend distribution?
A) 0
B) $ 80,000
C) $240,000
D) $700,000
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: C |



