Estate planning exam 4 questions well
answered 100% pass
Which of the following statements is not correct?
A. An organization that spends less than 85% of its adjusted net income on activities engaged in
for the active conduct of its exempt purpose is a public charity.
B. Public charities receive broad support from the general public.
A. An organization that spends less than 85% of its adjusted net income on activities engaged in
for the active conduct of its exempt purpose is a public charity.
Which of the following statements concerning a pooled income fund is correct?
A. A pooled income fund is created for each individual.
B. The income of a pooled income fund is paid to the contributors.
c. Pooled income funds invest strictly in tax-exempt securities.
d. The income of a pooled income fund is paid to the contributors.
d. The income of a pooled income fund is paid to the contributors.
Jane irrevocably transfers property to a trust over which she retains an annuity payment each
year equal to 6% of the initial fair market value of the property transferred to the trust. Jane
designates the American Heart Association as the remainder beneficiary. Which of the
following statements concerning this transfer is true?
A. Jane can make an additional contribution to the trust in subsequent years.
B. Jane will receive an income tax charitable deduction on her income tax return for the year in
which the trust is formed.
B. Jane will receive an income tax charitable deduction on her income tax return for the year in
which the trust is formed.
The explicit right of a trust beneficiary to withdraw some or all of any contribution to a trust for
a limited period of time after the contribution is a:
A. Lump sum death benefit
,B. Transfer for value
C. Disclaimer
D. Crummey Provision
D. Crummey Provision
Which of the following statements is(are) correct?
A. Life insurance proceeds payable to the estate of a decedent are included in the decedent's
federal gross estate.
B. The owner of a life insurance policy will include the value of the life insurance policy in his
federal gross estate if he dies before the insured.
C. Both (A) and (B).
D. Neither (A) nor (B).
C. Both (A) and (B).
Joe purchased a life insurance policy on his own life and never designated a beneficiary. In this
case, the life insurance policy death benefit is:
A. Included in Joe's federal gross estate if Joe dies within three years of the initial premium
payment.
B. Included in Joe's federal gross estate if Joe paid the premiums until his death.
C. Never included in Joe's federal gross estate.
D. Always included in Joe's federal gross estate.
D. Always included in Joe’s federal gross estate.
A transfer to which of the following organizations would NOT qualify for the unlimited
charitable deduction?
A. The United States of America.
B. The Bloomington Homeowner’s Association.
C. Mothers Against Drunk Driving.
D. The Society for the Protection of Tigers.
B. The Bloomington Homeowner’s Association.
. Don donated $400 to the local public broadcast television station during the annual fund
drive this year. In return for the $400 contribution, Don received a coffee mug and a pen with
, the station’s logo valued at $8. How much is Don’s charitable deductible contribution for the
year?
A. $0
B. $400
C. $392
D. $8
B. $400
Steve made the following transfers during the year:
· $10,000 to Louisiana State University. The $10,000 contribution allows him to purchase
football season tickets. Steve also bought the football season tickets at a cost of $5,000.
· $400 to the local public broadcast television station during the annual fund drive. In return for
the $400 contribution, Steve received a mug and pen with the station's logo valued at $8.
· 1,000 shares of ABC stock to the United Way. At the date of the contribution, the stock had a
fair market value of $50 per share. Steve's adjusted taxable basis in the stock was $10 per share
and he held the stock long term.
Steve's maximum charitable deduction is:
A. $50,000
B. $50,900
C. $40,000
D. $50,400
D. $50,400
Terrence contributed $15,000 to a foreign charitable organization. At the time of the
contribution, the organization told him that his contribution was tax deductible for income tax
purposes. Ignoring any income limitations, how much of the $15,000 contribution is deductible?
a. $0.
b. $7,500.
c. $10,000.
d. $15,000.
a. $0.
The organization to prevent cruelty to animals receives contributions from the general public to
fund programs to prevent cruelty to animals. Of its total support during the year, 75% of the
funds are from contributions from supporting individuals. What type of charity is the
answered 100% pass
Which of the following statements is not correct?
A. An organization that spends less than 85% of its adjusted net income on activities engaged in
for the active conduct of its exempt purpose is a public charity.
B. Public charities receive broad support from the general public.
A. An organization that spends less than 85% of its adjusted net income on activities engaged in
for the active conduct of its exempt purpose is a public charity.
Which of the following statements concerning a pooled income fund is correct?
A. A pooled income fund is created for each individual.
B. The income of a pooled income fund is paid to the contributors.
c. Pooled income funds invest strictly in tax-exempt securities.
d. The income of a pooled income fund is paid to the contributors.
d. The income of a pooled income fund is paid to the contributors.
Jane irrevocably transfers property to a trust over which she retains an annuity payment each
year equal to 6% of the initial fair market value of the property transferred to the trust. Jane
designates the American Heart Association as the remainder beneficiary. Which of the
following statements concerning this transfer is true?
A. Jane can make an additional contribution to the trust in subsequent years.
B. Jane will receive an income tax charitable deduction on her income tax return for the year in
which the trust is formed.
B. Jane will receive an income tax charitable deduction on her income tax return for the year in
which the trust is formed.
The explicit right of a trust beneficiary to withdraw some or all of any contribution to a trust for
a limited period of time after the contribution is a:
A. Lump sum death benefit
,B. Transfer for value
C. Disclaimer
D. Crummey Provision
D. Crummey Provision
Which of the following statements is(are) correct?
A. Life insurance proceeds payable to the estate of a decedent are included in the decedent's
federal gross estate.
B. The owner of a life insurance policy will include the value of the life insurance policy in his
federal gross estate if he dies before the insured.
C. Both (A) and (B).
D. Neither (A) nor (B).
C. Both (A) and (B).
Joe purchased a life insurance policy on his own life and never designated a beneficiary. In this
case, the life insurance policy death benefit is:
A. Included in Joe's federal gross estate if Joe dies within three years of the initial premium
payment.
B. Included in Joe's federal gross estate if Joe paid the premiums until his death.
C. Never included in Joe's federal gross estate.
D. Always included in Joe's federal gross estate.
D. Always included in Joe’s federal gross estate.
A transfer to which of the following organizations would NOT qualify for the unlimited
charitable deduction?
A. The United States of America.
B. The Bloomington Homeowner’s Association.
C. Mothers Against Drunk Driving.
D. The Society for the Protection of Tigers.
B. The Bloomington Homeowner’s Association.
. Don donated $400 to the local public broadcast television station during the annual fund
drive this year. In return for the $400 contribution, Don received a coffee mug and a pen with
, the station’s logo valued at $8. How much is Don’s charitable deductible contribution for the
year?
A. $0
B. $400
C. $392
D. $8
B. $400
Steve made the following transfers during the year:
· $10,000 to Louisiana State University. The $10,000 contribution allows him to purchase
football season tickets. Steve also bought the football season tickets at a cost of $5,000.
· $400 to the local public broadcast television station during the annual fund drive. In return for
the $400 contribution, Steve received a mug and pen with the station's logo valued at $8.
· 1,000 shares of ABC stock to the United Way. At the date of the contribution, the stock had a
fair market value of $50 per share. Steve's adjusted taxable basis in the stock was $10 per share
and he held the stock long term.
Steve's maximum charitable deduction is:
A. $50,000
B. $50,900
C. $40,000
D. $50,400
D. $50,400
Terrence contributed $15,000 to a foreign charitable organization. At the time of the
contribution, the organization told him that his contribution was tax deductible for income tax
purposes. Ignoring any income limitations, how much of the $15,000 contribution is deductible?
a. $0.
b. $7,500.
c. $10,000.
d. $15,000.
a. $0.
The organization to prevent cruelty to animals receives contributions from the general public to
fund programs to prevent cruelty to animals. Of its total support during the year, 75% of the
funds are from contributions from supporting individuals. What type of charity is the
