Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
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. - Correct
Answers ✅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. - Correct Answers ✅B. for the state for which it was
prepared.
In managing personal trust assets, a trustee should seek
which of the following?
,Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
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 -
Correct Answers ✅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. - Correct Answers ✅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
,Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
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. - Correct Answers ✅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 - Correct Answers
✅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?
, Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
A. Yes, the entire $1 million will qualify for the estate tax
marital and charitable deductions.
B. No, none of the $1 million will qualify for the estate tax
marital and charitable deductions.
C. Yes, the entire $1 million will qualify for the estate tax
marital deduction.
D. Yes, the value of W's income interest will qualify for the
marital deduction; the remainder will not qualify for any
deduction. - Correct Answers ✅C. Yes, the entire $1 million
will qualify for the estate tax marital deduction.
H makes a gift of property to a trust for the benefit of his
children. If H serves as a trustee, what limitations, if any,
should be placed on his distribution powers in order to avoid
adverse gift and estate tax consequences?
A. H's power to make distributions should be limited by
ascertainable standards such as health, support and
education.
B. No limitations are required.
C. H should be prohibited from participating in making any
distributions.
D. H's power to make distributions should be limited to those
required to discharge his legal obligation to support his
children. - Correct Answers ✅A. H's power to make
Questions and Answers (Complete
Practice Papers)
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. - Correct
Answers ✅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. - Correct Answers ✅B. for the state for which it was
prepared.
In managing personal trust assets, a trustee should seek
which of the following?
,Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
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 -
Correct Answers ✅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. - Correct Answers ✅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
,Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
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. - Correct Answers ✅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 - Correct Answers
✅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?
, Cannon CTFA Prep Solved Exam
Questions and Answers (Complete
Practice Papers)
A. Yes, the entire $1 million will qualify for the estate tax
marital and charitable deductions.
B. No, none of the $1 million will qualify for the estate tax
marital and charitable deductions.
C. Yes, the entire $1 million will qualify for the estate tax
marital deduction.
D. Yes, the value of W's income interest will qualify for the
marital deduction; the remainder will not qualify for any
deduction. - Correct Answers ✅C. Yes, the entire $1 million
will qualify for the estate tax marital deduction.
H makes a gift of property to a trust for the benefit of his
children. If H serves as a trustee, what limitations, if any,
should be placed on his distribution powers in order to avoid
adverse gift and estate tax consequences?
A. H's power to make distributions should be limited by
ascertainable standards such as health, support and
education.
B. No limitations are required.
C. H should be prohibited from participating in making any
distributions.
D. H's power to make distributions should be limited to those
required to discharge his legal obligation to support his
children. - Correct Answers ✅A. H's power to make
