CANNON TRUST SCHOOL II EXAM PREP 2026
STUDY GUIDE QUESTIONS AND ANSWERS
GRADED A+
◉ What is the Applicable exclusion Amount? Answer: $13.99 million
◉ What is the Annual Exclusion Amount? Answer: $ 19,000.00
◉ Who is liable for gift tax? Answer: Donor, Donor's estate, and
Donee if Donor fails to pay
◉ Federal Estate tax applies to the transfer of what? Answer:
Property at death
◉ How is Tentative Tax Calculated? Answer: Total gifts of Donor -
Annual exclusions, marital deduction, charitable deduction = taxable
gift. Add prior Taxable gifts to reach total taxable gifts which is a part
of tentative tax. Subtract Applicable Credit = gift tax due
◉ What credits are available against the Estate Tax? Answer: Unified
Credit,
Credit for Gift Taxes paid,
Credit for tax on prior transfers, and
,Credit for foreign death taxes
◉ When must Form 706 be filed? Answer: Within 9 months of Date
of Death
◉ What is the reporting requirement for Form 706 Answer: If the
value of the gross estate at the date of death, plus taxable gifts made
after 1976, is more than the BASIC EXCLUSION AMOUNT.
—Will also want to do it if electing portability
If there is a unique piece of property want on record to value incl
businesses so IRS agrees on value of underlying property
◉ Crypto, stock certs, cash, and royalties are examples of what type
of property Answer: Intangible Personal Property
◉ Mineral, water, and air rights are an example of what type of
property? Answer: Intangible Real Property
◉ What interest is both Present and Future, where the title holder
has full rights of disposition? Answer: Fee Simple. It is the most
complete, outright form of ownership
,◉ What type of property interest terminates at death of the holder,
reverting back to Grantor or passes to predetermined remainders
and thus holder has no rights of disposition? Answer: Life estate
◉ What type of property interest is held for a specified term of hears
with no right of disposition (reverts back to Grantor or passes
predetermined)? Answer: Estate for years
◉ How is the economy measured in modern econimics? Answer:
GDP, GNP
◉ Difference between GDP and GNP? Answer: GDP = ONLY domestic
products ; GNP= both domestic AND international activities
◉ What type of interest does a Life Estate create? Answer:
Determinable interest / Subject to condition
◉ What is it called when property passes based upon a condition or
failure of something to occur? Answer: Determinable Interest,
interest subject to condition
◉ taWhat type of property interest will or may be returned to
original owner? Answer: Reversionary interest
, ◉ What type of property interest will or may pass to successive
owners at a given time or occurence of an event? Answer:
Remainder interest
◉ List the four types of property that qualify as a present interest:
Answer: Fee Simple*
Life Estate
Estate for Years
Determinable or Conditional*
◉ List the four types of property that qualify as future interest:
Answer: Fee Simple,*
Reversionary,
Remainder,
Determinable or Conditional*
◉ A owns a Fee Simple interest and makes a transfer. What is the
interest of each of the below parties:
1. A to B
2. A to B for life then to C
3. A to B for Life
4. A to B for 10 years and then to C
5. A to B as long as B is found drug free in annual tests
STUDY GUIDE QUESTIONS AND ANSWERS
GRADED A+
◉ What is the Applicable exclusion Amount? Answer: $13.99 million
◉ What is the Annual Exclusion Amount? Answer: $ 19,000.00
◉ Who is liable for gift tax? Answer: Donor, Donor's estate, and
Donee if Donor fails to pay
◉ Federal Estate tax applies to the transfer of what? Answer:
Property at death
◉ How is Tentative Tax Calculated? Answer: Total gifts of Donor -
Annual exclusions, marital deduction, charitable deduction = taxable
gift. Add prior Taxable gifts to reach total taxable gifts which is a part
of tentative tax. Subtract Applicable Credit = gift tax due
◉ What credits are available against the Estate Tax? Answer: Unified
Credit,
Credit for Gift Taxes paid,
Credit for tax on prior transfers, and
,Credit for foreign death taxes
◉ When must Form 706 be filed? Answer: Within 9 months of Date
of Death
◉ What is the reporting requirement for Form 706 Answer: If the
value of the gross estate at the date of death, plus taxable gifts made
after 1976, is more than the BASIC EXCLUSION AMOUNT.
—Will also want to do it if electing portability
If there is a unique piece of property want on record to value incl
businesses so IRS agrees on value of underlying property
◉ Crypto, stock certs, cash, and royalties are examples of what type
of property Answer: Intangible Personal Property
◉ Mineral, water, and air rights are an example of what type of
property? Answer: Intangible Real Property
◉ What interest is both Present and Future, where the title holder
has full rights of disposition? Answer: Fee Simple. It is the most
complete, outright form of ownership
,◉ What type of property interest terminates at death of the holder,
reverting back to Grantor or passes to predetermined remainders
and thus holder has no rights of disposition? Answer: Life estate
◉ What type of property interest is held for a specified term of hears
with no right of disposition (reverts back to Grantor or passes
predetermined)? Answer: Estate for years
◉ How is the economy measured in modern econimics? Answer:
GDP, GNP
◉ Difference between GDP and GNP? Answer: GDP = ONLY domestic
products ; GNP= both domestic AND international activities
◉ What type of interest does a Life Estate create? Answer:
Determinable interest / Subject to condition
◉ What is it called when property passes based upon a condition or
failure of something to occur? Answer: Determinable Interest,
interest subject to condition
◉ taWhat type of property interest will or may be returned to
original owner? Answer: Reversionary interest
, ◉ What type of property interest will or may pass to successive
owners at a given time or occurence of an event? Answer:
Remainder interest
◉ List the four types of property that qualify as a present interest:
Answer: Fee Simple*
Life Estate
Estate for Years
Determinable or Conditional*
◉ List the four types of property that qualify as future interest:
Answer: Fee Simple,*
Reversionary,
Remainder,
Determinable or Conditional*
◉ A owns a Fee Simple interest and makes a transfer. What is the
interest of each of the below parties:
1. A to B
2. A to B for life then to C
3. A to B for Life
4. A to B for 10 years and then to C
5. A to B as long as B is found drug free in annual tests
