CANNON CTFA CERTIFICATION EVALUATION
2026 FULL QUESTIONS WITH SOLUTIONS
◉ Franklin created a revocable trust with income payable to his son,
Fred, after Franklin's death. At Fred's death, the trust assets pass to
Fred's son, Paul, if living, or to Paul's issue per stirpes. Franklin died
three years ago. He acted as trustee until his death. Thereafter, Fred
was successor trustee. Paul died last year, leaving two daughters.
Fred would like to disclaim any interest in the trust assets so that
they will be distributed to Paul's daughters, Freida and Sue. Which of
the following indicates whether Fred can make a qualified
disclaimer, and why?
A. He can, if the disclaimer is properly executed and filed within 9
months after Paul's death.
B. He can, if the disclaimer is properly executed and filed within 9
months after Paul's will is admitted to probate.
C. He can, if the disclaimer is executed and filed within 9 months
after Paul's death, but the disclaimer must be limited to Fred's
actuarial in. Answer: D. He cannot, since no disclaimer can be made
that would be recognized for federal transfer tax purposes at this
point.
◉ Keith died in November. In December, his company paid his estate
$100,000 in deferred compensation. Kieth left his entire estate to his
,brother Michael. Which of the following tax returns will NOT be
affected by this payment?
A. US Estate Tax (Form 706)
B. Keith's final US individual income tax (Form 1040)
C. Keith's estate's US fiduciary income tax (Form 1041)
D. Michael's US individual income tax (Form 1040). Answer: B.
Keith's final US individual income tax (Form 1040)
◉ A decedent passed away on September 18. Her income for the full
year in which she died was $85,000, of which $60,000 had been
earned and received as of September 18. How much income should
be reported on the decedent's estate's initial 1041 income tax
return?
A. $25,000
B. $60,000
C. $85,000
D. it depends on the fiscal year chosen for her estate. Answer: D. it
depends on the fiscal year chosen for her estate
◉ Which of the following best describes the income taxation of
estates?
,A. Taxable income will be taxed twice, once to the estate when
earned and again to the beneficiary upon distribution.
B. Taxable income will be taxed only once, either to the estate when
earned or to the beneficiary when distributed in the same tax year.
C. Taxable income will be taxed only once o the extent of
distributable net income (DNI) and twice when distributions exceed
DNI.
D. Taxable income will be taxed twice to the extent of distributable
net income (DNI) and only once when distributions exceed DNI..
Answer: B. Taxable income will be taxed only once, either to the
estate when earned or to the beneficiary when distributed in the
same tax year.
◉ Which of the following items comprising a decedent's estate is
NOT income in respect of a decedent?
A. Director's fee owed to the decedent
B. Life insurance payable to the estate
C. Profit-sharing plan account naming the estate as beneficiary
D. IRA naming the estate as beneficiary. Answer: B. Life insurance
payable to the estate
◉ Regulation 9 allows which of the following?
, A. A national bank acting as trustee to sell assets to or purchase
assets from another trust account for which it serves as trustee.
B. Directors of national banks to purchase assets from a trust
administered by the national bank if the price is equitable.
C. A national bank trust department managing a trust to pay a trust
officer individually for work as a co-trustee, without approval of the
board of directors.
D. Advertisement of a common trust fund's performance as long as
the reporting measurements meet AIMR standards.. Answer: A. A
national bank acting as trustee to sell assets to or purchase assets
from another trust account for which it serves as trustee.
◉ Which of the following is the best definition of a constructive
trust?
A. Trust created by explicit instructions, given either orally or in
writing.
B. Trust which without being expressed, is deductible from the
nature of the transaction.
C. Trust created by a court to benefit a party that has been
wrongfully deprived of its rights.
D. Trust created by a court when it is judged that it was the intention
of the parties to create a trust.. Answer: C. Trust created by a court to
benefit a party that has been wrongfully deprived of its rights.
2026 FULL QUESTIONS WITH SOLUTIONS
◉ Franklin created a revocable trust with income payable to his son,
Fred, after Franklin's death. At Fred's death, the trust assets pass to
Fred's son, Paul, if living, or to Paul's issue per stirpes. Franklin died
three years ago. He acted as trustee until his death. Thereafter, Fred
was successor trustee. Paul died last year, leaving two daughters.
Fred would like to disclaim any interest in the trust assets so that
they will be distributed to Paul's daughters, Freida and Sue. Which of
the following indicates whether Fred can make a qualified
disclaimer, and why?
A. He can, if the disclaimer is properly executed and filed within 9
months after Paul's death.
B. He can, if the disclaimer is properly executed and filed within 9
months after Paul's will is admitted to probate.
C. He can, if the disclaimer is executed and filed within 9 months
after Paul's death, but the disclaimer must be limited to Fred's
actuarial in. Answer: D. He cannot, since no disclaimer can be made
that would be recognized for federal transfer tax purposes at this
point.
◉ Keith died in November. In December, his company paid his estate
$100,000 in deferred compensation. Kieth left his entire estate to his
,brother Michael. Which of the following tax returns will NOT be
affected by this payment?
A. US Estate Tax (Form 706)
B. Keith's final US individual income tax (Form 1040)
C. Keith's estate's US fiduciary income tax (Form 1041)
D. Michael's US individual income tax (Form 1040). Answer: B.
Keith's final US individual income tax (Form 1040)
◉ A decedent passed away on September 18. Her income for the full
year in which she died was $85,000, of which $60,000 had been
earned and received as of September 18. How much income should
be reported on the decedent's estate's initial 1041 income tax
return?
A. $25,000
B. $60,000
C. $85,000
D. it depends on the fiscal year chosen for her estate. Answer: D. it
depends on the fiscal year chosen for her estate
◉ Which of the following best describes the income taxation of
estates?
,A. Taxable income will be taxed twice, once to the estate when
earned and again to the beneficiary upon distribution.
B. Taxable income will be taxed only once, either to the estate when
earned or to the beneficiary when distributed in the same tax year.
C. Taxable income will be taxed only once o the extent of
distributable net income (DNI) and twice when distributions exceed
DNI.
D. Taxable income will be taxed twice to the extent of distributable
net income (DNI) and only once when distributions exceed DNI..
Answer: B. Taxable income will be taxed only once, either to the
estate when earned or to the beneficiary when distributed in the
same tax year.
◉ Which of the following items comprising a decedent's estate is
NOT income in respect of a decedent?
A. Director's fee owed to the decedent
B. Life insurance payable to the estate
C. Profit-sharing plan account naming the estate as beneficiary
D. IRA naming the estate as beneficiary. Answer: B. Life insurance
payable to the estate
◉ Regulation 9 allows which of the following?
, A. A national bank acting as trustee to sell assets to or purchase
assets from another trust account for which it serves as trustee.
B. Directors of national banks to purchase assets from a trust
administered by the national bank if the price is equitable.
C. A national bank trust department managing a trust to pay a trust
officer individually for work as a co-trustee, without approval of the
board of directors.
D. Advertisement of a common trust fund's performance as long as
the reporting measurements meet AIMR standards.. Answer: A. A
national bank acting as trustee to sell assets to or purchase assets
from another trust account for which it serves as trustee.
◉ Which of the following is the best definition of a constructive
trust?
A. Trust created by explicit instructions, given either orally or in
writing.
B. Trust which without being expressed, is deductible from the
nature of the transaction.
C. Trust created by a court to benefit a party that has been
wrongfully deprived of its rights.
D. Trust created by a court when it is judged that it was the intention
of the parties to create a trust.. Answer: C. Trust created by a court to
benefit a party that has been wrongfully deprived of its rights.
