Cannon CTFA Prep Exam Questions with 100% Correct Answers | Verified | Latest Update

Cannon CTFA Prep Exam Questions with
100% Correct Answers | Verified | Latest
Update

JeanTandTJohnTSimmonsTareTmarriedTandTownTtheirTownThomeTasTtena
ntsTbyTentirety.TWhenTJohnTdiesTtheThomeTisTvaluedTatT$350,000.THowT
muchTwillTbeTcountedTinThisTgrossTtaxableTestate?


A.TNone,TasTitTpassesTdirectlyTtoThisTspouse,TJean.
B.T$175,000T-TorTone-halfTofTtheTvalue
C.T$225,000T-TorTtheTfullTamountTminusTtheT$125,000Tone-
timeTexclusionTforTcapitalTgainsTonTaTpersonTresidence.
D.T$350,000T-TtheTfullTamountTisTincludable.T-TCorrectTAnswer-
B.T$175,000T-TorTone-halfTtheTvalue


OnceTaTwillTisTproperlyTdraftedTitTisTvalid:


A.TinTallTstates.
B.TforTtheTstateTforTwhichTitTwasTprepared.
C.TinTallTstatesTforTaTperiodTofT5Tyears.
D.TforTtheTstateTforTwhichTitTwasTpreparedTforTaTperiodTofT5Tyears.T-
TCorrectTAnswer-B.TforTtheTstateTforTwhichTitTwasTprepared.

,InTmanagingTpersonalTtrustTassets,TaTtrusteeTshouldTseekTwhichTofTtheT
following?


A.TmaximumTincome
B.TpreservationTofTcapital
C.TreasonableTincomeTandTpreservationTofTcapital,TincludingTpurchasin
gTpower
D.TmaximumTincomeTandTreasonableTpreservationTofTcapitalT-
TCorrectTAnswer-

C.TreasonableTincomeTandTpreservationTofTcapitalTincludingTpurchasing
Tpower




ATdecedent'sTestateTbeingTsettledTbyTyourTbankTcontainsTanTantiqueTa
utomobile.TOneTofTtheTdirectorsTofTyourTbankTindicatesTthatTheTwouldT
likeTtoTbuyTit.TYouTshouldTdoTwhichTofTtheTfollowing?


A.TSellTitTtoThimTatTaTbargainTpriceTandTbefriendThim.
B.THaveTaTqualifiedTappraisalTdoneTandTofferTitTtoThimTatTthatTvalue.
C.TExplainTthatTheTmayTnotTpurchaseTtheTcarTfromTtheTestate.
D.TArrangeTforTaTpublicTauctionTatTwhichTheTmayTbuyTitTifTheTisTtheThigh
estTbidder.T-TCorrectTAnswer-
C.TExplainTthatTheTmayTnotTpurchaseTtheTcarTfromTtheTestate.


IfTyouTholdTaTrentalTpropertyTinTanTirrevocableTtrust,TwhenTisTitTallTrigh
tTtoTrentTtoTanTemployeeTofTyourTtrustTdepartment?

,A.TNever
B.TWhenTtheTemployeeTpaysTfairTrent.
C.TWhenTtheTemployeeThasTbeenTwithTyouTatTleastT5TyearsTandTcanTbeT
trusted.
D.TWhenTtheTemployeeThasTnoTconnectionTwithTtheTaccountTorTbenefic
iaries.T-TCorrectTAnswer-A.TNever


WhichTofTtheTfollowingTgenerallyTmayTNOTTholdTrealTproperty?


A.TRevocableTLivingTTrustsTtrusteedTbyTaTcorporateTfiduciary.
B.TUniformTGiftTtoTMinorsTAccount
C.T2503(c)TMinorsTTrust
D.TUniformTTransferTtoTMinorsTAccountT-TCorrectTAnswer-
B.TUniformTGiftsTtoTMinorsTAccount


H'sTwillTprovidesTthatTuponThisTdeath,T$1TmillionTwillTbeTheldTinTaTtrust
TforTtheTbenefitTofThisTwife,TW.TThisTtrustTprovidesTthatTWTwillTreceiveT

allTofTtheTtrustTincomeTandTwillTreceiveTdistributionsTofTprincipalTintThe
TformTofTanTannuityTforTherTlifetime.TAtTW'sTdeath,TtheTremainingTtrust

TassetsTwillTbeTdistributedTtoTaTdesignatedTcharity.TH'sTexecutorTintend

sTtoTmakeTaT"QTIP"TelectionTforTthisTtrust.TWillTtheTlegacyTtoTtheTtrust,T
orTanyTpartTthereof,TbeTdeductibleTbyTH'sTestate,TorTifTso,Twhy?

, A.TYes,TtheTentireT$1TmillionTwillTqualifyTforTtheTestateTtaxTmaritalTandT
charitableTdeductions.
B.TNo,TnoneTofTtheT$1TmillionTwillTqualifyTforTtheTestateTtaxTmaritalTan
dTcharitableTdeductions.
C.TYes,TtheTentireT$1TmillionTwillTqualifyTforTtheTestateTtaxTmaritalTded
uction.
D.TYes,TtheTvalueTofTW'sTincomeTinterestTwillTqualifyTforTtheTmaritalTde
duction;TtheTremainderTwillTnotTqualifyTforTanyTdeduction.T-
TCorrectTAnswer-

C.TYes,TtheTentireT$1TmillionTwillTqualifyTforTtheTestateTtaxTmaritalTded
uction.


HTmakesTaTgiftTofTpropertyTtoTaTtrustTforTtheTbenefitTofThisTchildren.TIfT
HTservesTasTaTtrustee,TwhatTlimitations,TifTany,TshouldTbeTplacedTonThis
TdistributionTpowersTinTorderTtoTavoidTadverseTgiftTandTestateTtaxTcons

equences?


A.TH'sTpowerTtoTmakeTdistributionsTshouldTbeTlimitedTbyTascertainable
TstandardsTsuchTasThealth,TsupportTandTeducation.


B.TNoTlimitationsTareTrequired.T
C.THTshouldTbeTprohibitedTfromTparticipatingTinTmakingTanyTdistributio
ns.
D.TH'sTpowerTtoTmakeTdistributionsTshouldTbeTlimitedTtoTthoseTrequire
dTtoTdischargeThisTlegalTobligationTtoTsupportThisTchildren.T-
TCorrectTAnswer-

A.TH'sTpowerTtoTmakeTdistributionsTshouldTbeTlimitedTbyTascertainable
TstandardsTsuchTasThealth,TsupportTandTeducation.