1 | Page
Cannon Trust 1 Questions and Correct
Answers
What is the Applicable Credit Amount for gifts? Ans: $ 5,541,800
NEED TO UPDATE
What is the Applicable exclusion Amount? Ans: $13,990,000
What is the Annual Exclusion Amount? Ans: $ 19,000
Who is liable for gift tax? Ans: Donor, Donor's estate, and Donee if
Donor fails to pay
Federal Estate tax applies to the transfer of what? Ans: Property at
death
How is Tentative Gif Tax Calculated?t Ans: 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? Ans: Unified
Credit,
Credit for Gift Taxes paid,
Credit for tax on prior transfers, and
Credit for foreign death taxes
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, 2 | Page
When must Form 706 be filed? Ans: Within 9 months of Date of
Death
What is the reporting requirement for Form 706 Ans: If the value
of the gross eestate 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 Ans: Intangible Personal Property
Mineral, water, and air rights are an example of what type of
property? Ans: Intangible Real Property
What interest is both Present and Future, where the title holder
has full rights of disposition? Ans: 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? Ans: 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)? Ans: Estate for years
How is the economy measured in modern econimics? Ans: GDP,
GNP
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, 3 | Page
Difference between GDP and GNP? Ans: GDP = ONLY domestic
products ; GNP= both domestic AND international activities
What type of interest does a Life Estate create? Ans: Determinable
interest / Subject to condition
What is it called when property passes based upon a condition or
failure of something to occur? Ans: Determinable Interest, interest
subject to condition
What type of property interest will or may be returned to original
owner? Ans: Reversionary interest
What type of property interest will or may pass to successive
owners at a given time or occurence of an event? Ans: Remainder
interest
List the four types of property that qualify as a present interest:
Ans: Fee Simple*
Life Estate
Estate for Years
Determinable or Conditional*
List the four types of property that qualify as future interest: Ans:
Fee Simple,*
Reversionary,
Remainder,
Determinable or Conditional*
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, 4 | Page
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
6. A to B for 10 years Ans: 1. Fee Simple Absolute (B)
2. Life Estate (B) Remainder (C)
3. FSA with right of reversion (A), Life Estate (B)
4. Estate for years (B), Remainder (C)
5. Possibility of Reverter (A), Conditional Fee Simple subject to
condition subsequent
6. FSA (A), Estate for Years
Nominal and Real adjustments apply to what: Ans: GDP
Adjustments
What are the final goods and services at current market prices?
Ans: Nominal GDP Adjustment
© 2025 All rights reserved
Cannon Trust 1 Questions and Correct
Answers
What is the Applicable Credit Amount for gifts? Ans: $ 5,541,800
NEED TO UPDATE
What is the Applicable exclusion Amount? Ans: $13,990,000
What is the Annual Exclusion Amount? Ans: $ 19,000
Who is liable for gift tax? Ans: Donor, Donor's estate, and Donee if
Donor fails to pay
Federal Estate tax applies to the transfer of what? Ans: Property at
death
How is Tentative Gif Tax Calculated?t Ans: 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? Ans: Unified
Credit,
Credit for Gift Taxes paid,
Credit for tax on prior transfers, and
Credit for foreign death taxes
© 2025 All rights reserved
, 2 | Page
When must Form 706 be filed? Ans: Within 9 months of Date of
Death
What is the reporting requirement for Form 706 Ans: If the value
of the gross eestate 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 Ans: Intangible Personal Property
Mineral, water, and air rights are an example of what type of
property? Ans: Intangible Real Property
What interest is both Present and Future, where the title holder
has full rights of disposition? Ans: 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? Ans: 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)? Ans: Estate for years
How is the economy measured in modern econimics? Ans: GDP,
GNP
© 2025 All rights reserved
, 3 | Page
Difference between GDP and GNP? Ans: GDP = ONLY domestic
products ; GNP= both domestic AND international activities
What type of interest does a Life Estate create? Ans: Determinable
interest / Subject to condition
What is it called when property passes based upon a condition or
failure of something to occur? Ans: Determinable Interest, interest
subject to condition
What type of property interest will or may be returned to original
owner? Ans: Reversionary interest
What type of property interest will or may pass to successive
owners at a given time or occurence of an event? Ans: Remainder
interest
List the four types of property that qualify as a present interest:
Ans: Fee Simple*
Life Estate
Estate for Years
Determinable or Conditional*
List the four types of property that qualify as future interest: Ans:
Fee Simple,*
Reversionary,
Remainder,
Determinable or Conditional*
© 2025 All rights reserved
, 4 | Page
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
6. A to B for 10 years Ans: 1. Fee Simple Absolute (B)
2. Life Estate (B) Remainder (C)
3. FSA with right of reversion (A), Life Estate (B)
4. Estate for years (B), Remainder (C)
5. Possibility of Reverter (A), Conditional Fee Simple subject to
condition subsequent
6. FSA (A), Estate for Years
Nominal and Real adjustments apply to what: Ans: GDP
Adjustments
What are the final goods and services at current market prices?
Ans: Nominal GDP Adjustment
© 2025 All rights reserved
