CANNON TRUST SCHOOL I EXAM 2
CERTIFICATION EVALUATION 2026 QUESTIONS
WITH PRACTICE SOLUTION GRADED A+
◉ A simple trust earned $27,000 in dividends. It paid $4,000 in
trustee fees, one-half from income and one-half from principal. Trust
accounting income is which of the following?
A. $0
B. $23,000
C. $25,000
D. $27,000. Answer: C. $25,000
◉ If the Trust Document is silent with respect to a certain cash
transaction, the Trust Administrator should first look to which of the
following for guidance?
A. Court of Jurisdiction
B. Principal and Income Law of the State
C. Grantor
D. OCC. Answer: B. Principal and Income Law of the State
,◉ When determining a long-term sustainable rate of return for a
unitrust payout, which of the following best represents the range of
high confidence payout percentages?
A. 1-2%
B. 2-3%
C. 3-5%
D. 120% of the federal midterm rate. Answer: C. 3-5%
◉ Which of the following is an example of tangible personal
property?
A. Gold bar
B. Common stock certificate
C. Patent
D. Vacant land. Answer: A. Gold bar
◉ Which of the following is an example of tangible personal
property?
A. Family residence
B. IBM stock
C. Jewelry
,D. Rental house. Answer: C. Jewelry
◉ A to B for life, then to C. Following this transfer, which of the
following is true?
A. A has a fee simple interest.
B. B has a reversionary interest.
C. C has a remainder interest.
D. C has a life estate.. Answer: C. C has a remainder interest.
◉ Under joint tenants with rights of survivorship, when one tenant
dies which of the following best describes the result?
A. Her share passes through her will to her heirs.
B. Her share passes by law to her heirs, not through her will.
C. Her share passes to the surviving joint tenant regardless of what
her will says.
D. The asset must be sold and the estate gets 1/2 of the proceeds..
Answer: C. Her share passes to the surviving joint tenant regardless
of what her will says.
◉ A decedent owns $400,000 in his own name, a $200,000 home in
joint tenancy with his spouse and a $100,000 life insurance policy
, with the children as beneficiaries. Which of the following is the
amount passing through probate?
A. $0.
B. $400,000.
C. $500,000.
D. $700,000. Answer: B. $400,000.
◉ In cutting down a tree, which of the following occurs?
A. Real property is converted to personal property.
B. Personal property is converted to real property.
C. Real property is converted to a fixture.
D. There is no conversion, the tree remains real property. Answer: A.
Real property is converted to personal property.
◉ Which of the following transfers are includable in the gross estate
of the donor if made within 3 years of death?
A. Gift of $8,000 cash value life insurance policy to son.
B. Gift of $9,800 cash to daughter.
C. Gift of $10,000 cash to friend.
CERTIFICATION EVALUATION 2026 QUESTIONS
WITH PRACTICE SOLUTION GRADED A+
◉ A simple trust earned $27,000 in dividends. It paid $4,000 in
trustee fees, one-half from income and one-half from principal. Trust
accounting income is which of the following?
A. $0
B. $23,000
C. $25,000
D. $27,000. Answer: C. $25,000
◉ If the Trust Document is silent with respect to a certain cash
transaction, the Trust Administrator should first look to which of the
following for guidance?
A. Court of Jurisdiction
B. Principal and Income Law of the State
C. Grantor
D. OCC. Answer: B. Principal and Income Law of the State
,◉ When determining a long-term sustainable rate of return for a
unitrust payout, which of the following best represents the range of
high confidence payout percentages?
A. 1-2%
B. 2-3%
C. 3-5%
D. 120% of the federal midterm rate. Answer: C. 3-5%
◉ Which of the following is an example of tangible personal
property?
A. Gold bar
B. Common stock certificate
C. Patent
D. Vacant land. Answer: A. Gold bar
◉ Which of the following is an example of tangible personal
property?
A. Family residence
B. IBM stock
C. Jewelry
,D. Rental house. Answer: C. Jewelry
◉ A to B for life, then to C. Following this transfer, which of the
following is true?
A. A has a fee simple interest.
B. B has a reversionary interest.
C. C has a remainder interest.
D. C has a life estate.. Answer: C. C has a remainder interest.
◉ Under joint tenants with rights of survivorship, when one tenant
dies which of the following best describes the result?
A. Her share passes through her will to her heirs.
B. Her share passes by law to her heirs, not through her will.
C. Her share passes to the surviving joint tenant regardless of what
her will says.
D. The asset must be sold and the estate gets 1/2 of the proceeds..
Answer: C. Her share passes to the surviving joint tenant regardless
of what her will says.
◉ A decedent owns $400,000 in his own name, a $200,000 home in
joint tenancy with his spouse and a $100,000 life insurance policy
, with the children as beneficiaries. Which of the following is the
amount passing through probate?
A. $0.
B. $400,000.
C. $500,000.
D. $700,000. Answer: B. $400,000.
◉ In cutting down a tree, which of the following occurs?
A. Real property is converted to personal property.
B. Personal property is converted to real property.
C. Real property is converted to a fixture.
D. There is no conversion, the tree remains real property. Answer: A.
Real property is converted to personal property.
◉ Which of the following transfers are includable in the gross estate
of the donor if made within 3 years of death?
A. Gift of $8,000 cash value life insurance policy to son.
B. Gift of $9,800 cash to daughter.
C. Gift of $10,000 cash to friend.
