Cannon Trust School 1 exam with correct answers

Cannon Trust School 1 exam with |\ |\ |\ |\ |\ |\




correct answers |\




Your client owns a $200,000 home in joint tenancy, a $15,000 car
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in his own name, an $8,000 CD in his name alone, and a
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$100,000-life insurance policy with a cash value of $10,000, |\ |\ |\ |\ |\ |\ |\ |\ |\


payable to his wife. What is the value of his probate estate?
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- $23,000
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- $33,000
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- $223,000
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- $333,000 - CORRECT ANSWERS ✔✔$23,000
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A simple trust earned $27,000 in dividends. It paid $4,000 in
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trustee fees, one-half |\ |\




from income and one-half from principal. Trust accounting income
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is which of the following?
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- $0 |\




- $23,000
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- $25,000
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- $27,000 - CORRECT ANSWERS ✔✔$25,000
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If the Trust Document is silent with respect to a certain cash
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transaction, the Trust Administrator should first look to which of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\


the following for guidance?
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- Court of Jurisdiction
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,- Principal and Income Law of the State
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- Grantor
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- OCC - CORRECT ANSWERS ✔✔Principal and Income Law of the
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State


When determining a long-term sustainable rate of return for a
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unitrust payout, which of the following best represents the range
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of high confidence payout percentages?
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- 1-2%
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- 2-3%
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- 3-5%
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- 120% of the federal midterm rate - CORRECT ANSWERS ✔✔3-
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5%


Which of the following is an example of tangible personal
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property?
- Gold bar
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- Common stock certificate
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- Patent
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- Vacant land - CORRECT ANSWERS ✔✔Gold bar
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Which of the following is an example of tangible personal
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property?
- Family residence
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- IBM stock
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- Jewelry
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,- Rental house - CORRECT ANSWERS ✔✔Jewelry
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A to B for life, then to C. Following this transfer, which of the
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following is true? |\ |\




- A has a fee simple interest.
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- B has a reversionary interest.
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- C has a remainder interest.
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- C has a life estate. - CORRECT ANSWERS ✔✔C has a remainder
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interest.


Under joint tenants with rights of survivorship, when one tenant
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dies which of the following best describes the result?
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- Her share passes through her will to her heirs.
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- Her share passes by law to her heirs, not through her will.
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- Her share passes to the surviving joint tenant regardless of
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what her will says. |\ |\ |\




- The asset must be sold and the estate gets 1/2 of the proceeds.
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- CORRECT ANSWERS ✔✔Her share passes to the surviving joint
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tenant regardless of what her will says.
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A decedent owns $400,000 in his own name, a $200,000 home in
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joint tenancy with his spouse and a $100,000 life insurance
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policy with the children as beneficiaries. Which of the following is
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the amount passing through probate?
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- 0. |\




- $400,000.
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, - $500,000.
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- $700,000. - CORRECT ANSWERS ✔✔$400,000
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In cutting down a tree, which of the following occurs?
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- Real property is converted to personal property.
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- Personal property is converted to real property.
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- Real property is converted to a fixture.
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- There is no conversion, the tree remains real property. -
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CORRECT ANSWERS ✔✔Real property is converted to personal |\ |\ |\ |\ |\ |\ |\ |\


property.


Which of the following transfers are includable in the gross estate
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of the donor if made within 3 years of death?
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- Gift of $8,000 cash value life insurance policy to son.
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- Gift of $9,800 cash to daughter.
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- Gift of $10,000 cash to friend.
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- Gift of $5,000 stock in a closely held company to parent. -
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CORRECT ANSWERS ✔✔Gift of $8,000 cash value life insurance |\ |\ |\ |\ |\ |\ |\ |\ |\


policy to son. |\ |\




Which of the following can be deducted either on the decedent's
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final 1040 income tax return or on the Form 706 Estate Tax
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return?
- Funeral expenses.
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- Medical expenses relating to the decedent's last illness.
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- Court costs in probating the estate.
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