Which of the following statements concerning the inclusion in a decedent-employee’s gross estate of a lump-sum distribution from a qualified retirement plan to a beneficiary other than the employee’s estate is (are) correct?

l. Lump-sum distributions of payments attributable to the employer’s contributions are excluded from the gross estate.

ll. Lump-sum distributions of payments attributable to the decedent-employee’s contributions are excluded from the gross estate.

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John plans to transfer his life insurance policy to an irrevocable trust for the benefit of his 19-yearold daughter, Jane.

Which of the following conditions will enable the gift to qualify for the annual exclusion?

l. Jane is the irrevocable beneficiary of the life insurance trust but cannot withdraw from the trust until the death benefits are paid.

ll. Jane is given “Crummey” demand powers permitting the withdrawal at her discretion of the annual additions to the trust.

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Which of the following statements concerning the taxation of estates and trusts is (are) correct?

l. They are taxed similarly to partnership entities.

II. They are taxed on distributable net income (DNI) that is retained.

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Which of the following statements concerning pooled-income funds is (are) correct?

L. A pooled income fund is similar to a mutual fund maintained by a qualified charity.

ll. It is an irrevocable arrangement in which the remainder interest passes to charity.

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Which of the following statements concerning ownership of property in the form of a joint tenancy with right of survivorship is (are) correct?

I. Either real or personal property may be owned as a joint tenancy with right of survivorship.

Il. Nonqualified joint tenants with right of survivorship may have unequal separate shares of the property.

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Which of the following statements concerning the methods of valuing a closely held business for federal estate tax purposes is (are) correct?

l. The capitalization-of-adjusted-earnings method uses a capitalization rate that varies inversely with the degree of risk and rate of return.

II. The adjusted-book value method involves adjusting the asset components of a business to an approximate fair market value for each component.

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Which of the following statements concerning guardians is (are) correct?

l. A guardian is appointed by a court.

Il. A guardian holds equitable title to the property he administers for his or her ward.

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Which of the following types of partial interests in property may be allowed a charitable deduction for estate tax purposes?

l. A remainder interest in the donor vacation home

ll. A testamentary gift of a percentage of a decedent entire interest in property held in trust

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A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1, 50, 0000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner.

Which of the following statements concerning this action is (are) correct?

l. If the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.

ll. If the husband dies first; the probate costs of his estate could be increased.

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Which of the following statements concerning certain types of property interests is (are) correct?

I. The person or entity who has title to the property is the legal owner of the property.

II. The person who has the right to all income earned on the property is the beneficial or equitable owner of the property.

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