Trusts and Taxes: Transfer, Income and Property Tax Implications of Trusts - Module 6 of 6


Question 1

Mike and Carol are married. Mike wants to purchase a $25,000 car for Bobby, their son. Is this gift subject to gift tax?

Question 2

Which of the following types of gifts are not subject to gift tax because of the gift tax annual exclusion?

Question 3

A beneficiary’s right of withdrawal upon contribution does which of the following?

Question 4

Which of the following assets are included in Joe’s taxable estate?

Question 5

Mike has the authority, as trustee of the ABC trust, to determine, during his lifetime, who shall receive the assets of the trust upon Mike’s death. However, the trust only allows him to appoint the assets “to or among Mike’s children and grandchildren.” Are the assets in ABC trust considered part of Mike’s taxable estate?

Question 6

The XYZ Trust, funded by Grantor, earned $10,000 in income last year. Assuming that the trust is not a grantor trust, which of the following is correct?

Question 7

Alan, Bernard and Carolyn are beneficiaries of the ABC trust. Alan earns $600,000 per year in income (putting him in the highest tax bracket), while Bernard and Carolyn earn much less. During 2018, the trust gave each beneficiary $20,000. The trust earned a total of $70,000 in income. Which of the following is correct?

Question 8

Which of the following is true of grantor trusts?

Question 9

George established and funds the GJ trust for the benefit of his daughter, Jennifer. The trust provides that Jennifer has the right to all trust income. However, George has the right to change the beneficiary from Jennifer to one of his other children at any time and for any reason. The trust’s income will be considered taxable income to whom?

Question 10

Renee purchased a house in 1970 for $30,000. In 2019, the house is worth $280,000. She wants to remove the house from her name for Medicaid planning purposes. Which of the following is correct?