Cannon CTFA Prep Questions & Correct Answers | Latest Update |Already Graded A+

Jean and John Simmons are married and own their own home as tenants by entirety. When John dies the home is valued at $350,000. How much will be counted in his gross taxable estate? A. None, as it passes directly to his spouse, Jean. B. $175,000 - or one-half of the value C. $225,000 - or the full amount minus the $125,000 one-time exclusion for capital gains on a person residence. D. $350,000 - the full amount is includable. : B. $175,000 - or one-half the value Once a will is properly drafted it is valid: A. in all states. B. for the state for which it was prepared. C. in all states for a period of 5 years. D. for the state for which it was prepared for a period of 5 years. : B. for the state for which it was prepared. 2 | P a g e In managing personal trust assets, a trustee should seek which of the following? A. maximum income B. preservation of capital C. reasonable income and preservation of capital, including purchasing power D. maximum income and reasonable preservation of capital : C. reasonable income and preservation of capital including purchasing power A decedent's estate being settled by your bank contains an antique automobile. One of the directors of your bank indicates that he would like to buy it. You should do which of the following? A. Sell it to him at a bargain price and befriend him. B. Have a qualified appraisal done and offer it to him at that value. C. Explain that he may not purchase the car from the estate. D. Arrange for a public auction at which he may buy it if he is the highest bidder. : C. Explain that he may not purchase the car from the estate. If you hold a rental property in an irrevocable trust, when is it all right to rent to an employee of your trust department? A. Never 3 | P a g e B. When the employee pays fair rent. C. When the employee has been with you at least 5 years and can be trusted. D. When the employee has no connection with the account or beneficiaries. : A. Never Which of the following generally may NOT hold real property? A. Revocable Living Trusts trusteed by a corporate fiduciary. B. Uniform Gift to Minors Account C. 2503(c) Minors Trust D. Uniform Transfer to Minors Account : B. Uniform Gifts to Minors Account H's will provides that upon his death, $1 million will be held in a trust for the benefit of his wife, W. This trust provides that W will receive all of the trust income and will receive distributions of principal int he form of an annuity for her lifetime. At W's death, the remaining trust assets will be distributed to a designated charity. H's executor intends to make a "QTIP" election for this trust. Will the legacy to the trust, or any part thereof, be deductible by H's estate, or if so, why? A. Yes, the entire $1 million will qualify for the estate tax marital and charitable deductions