Solved by verified expert :2363. CHAPTER
19—FAMILY TAX PLANNING Question MC #21
In 1989, Tony, a resident of New York, purchases realty for $500,000 listing
title as “Tony and Ben, joint tenants with right of survivorship.” In 2011,
Tony predeceases Ben when the realty is worth $2,000,000. Ben’s income tax
basis in the property is:
a.
$0.
b. $250,000.
c. $1,000,000.
d. $1,250,000.
e. $2,250,000.
2364. CHAPTER
19—FAMILY TAX PLANNING Question MC #22
In 1990, Jude, a resident of New York, purchases realty for $500,000 listing
title as “Jude and Tony, joint tenants with right of survivorship.” In 2011,
Tony predeceases Jude when the realty is worth $2,000,000. Tony’s income tax
basis in the property is:
a.
$0.
b. $250,000.
c. $1,000,000.
d. $1,250,000.
e. $2,250,000.
2365. CHAPTER
19—FAMILY TAX PLANNING Question MC #23
Sam and Lucinda are husband and wife and have always lived in a community
property state. At the time of Lucinda’s prior death, part of their community
property includes:
Adjusted
Fair
Market
Basis
Value
Stock in Green Corporation
$2,000,000
$1,000,000
Apartment building
3,000,000
6,000,000
Under Lucinda’s will, all of her property passes to Sam. After Lucinda’s death,
Sam’s income tax basis in this property is:
a.
$3,500,000.
b. $4,000,000.
c. $5,000,000.
d. $7,000,000.
e. $8,000,000.
2366. CHAPTER
19—FAMILY TAX PLANNING Question MC #24
The election of § 2032 (alternate valuation date) for estate tax purposes:
a.
Reduces the overall basis of all assets included in the decedent’s estate.
b. Has no effect on the overall basis of
the assets belonging to the surviving spouse’s share of the community property.
c. Means that no assets will end up
having a higher income tax basis than their date of death value.
d. Has no effect on income tax basis if
the heirs chooses not to make the election.
e. None of the above.
2367. CHAPTER
19—FAMILY TAX PLANNING Question MC #25
In January 2011, Clint makes a gift of his beach house (basis of $113,000; fair
market value of $413,000) to his aunt. As a result of the transfer, Clint pays
a gift tax of $20,000. The aunt dies in December 2011, when the property is
worth $420,000. Under the terms of the aunt’s will, the property passes to
Clint. Clint’s income tax basis in the beach house is:
a.
$118,000.
b. $128,000.
c. $133,000.
d. $420,000.
e. None of the above.
2368. CHAPTER
19—FAMILY TAX PLANNING Question MC #26
In April 2011, Tim makes a gift of real estate (basis of $900,000; fair market
value of $800,000) to his aunt. After the gift, the aunt makes $50,000 worth of
capital improvements to the property. The aunt dies in March 2012, when the
property is worth $840,000. Under the aunt’s will, the realty passes to Tim.
Tim’s income tax basis in the property is:
a.
$840,000.
b. $890,000.
c. $900,000.
d. $950,000.
e. None of the above.
2369. CHAPTER
19—FAMILY TAX PLANNING Question MC #27
In June 2010, Debra makes a gift of securities (basis of $613,000; fair market
value of $913,000) to her uncle, upon which a gift tax of $60,000 is paid. The
uncle dies in July 2011, when the securities are worth $950,000. Under the
terms of the uncle’s will, the securities return to Debra. Debra’s income tax
basis in the securities is:
a.
$970,000.
b. $950,000.
c. $633,000.
d. $613,000.
e. None of the above.
2370. CHAPTER
19—FAMILY TAX PLANNING Question MC #28
Paul dies and leaves his traditional IRA to Evelyn. Which statement is correct?
a.
Because of the step-up in basis received at death, the IRA causes no income tax
consequences to Evelyn.
b. The IRA is not included in Paul’s gross
estate.
c. If Evelyn is Paul’s surviving spouse,
she can roll over the IRA into her own IRA without causing any adverse tax
consequences.
d. If Evelyn is Paul’s daughter, she can
defer any distributions from the IRA until she reaches age 70 1/2 without
causing any adverse tax consequences.
e. None of the above.
2371. CHAPTER
19—FAMILY TAX PLANNING Question MC #29
Becky inherited property from her mother seven years ago. The property was
listed on her mother’s estate tax return (Form 706) as having a value of
$300,000. Becky is going to sell the property for $800,000, but she believes
her real income tax basis is much more than $300,000. Which of the following
factors, if any, helps Becky in challenging this basis?
a.
She should file an amended Form 706 showing a higher value.
b. She is not certain what the exact
value of the property was seven years ago.
c. She was the executor of her mother’s
estate.
d. The value listed on Form 706 was not
the result of a negotiated compromise between the IRS and the estate.
e. None of the above.
2372. CHAPTER
19—FAMILY TAX PLANNING Question MC #30
In making gifts of property to family members, which of the following generates
income tax consequences to the donor?
a.
Transferring U.S. savings bonds.
b. Transferring an installment note
receivable.
c. Making a contribution to a § 529 plan
on behalf of the donee.
d. Transferring real estate which has a
potential for depreciation recapture.
e. Choices a. and b. but not c. and d.
