HS330 Practice Exam.pdf

HS330 test questions and answers for Fundamentals of Estate Planning, covering topics such as deductions from a decedent's gross estate, guardians for minors, real property ownership, community property, contesting a will, irrevocable trusts, asset valuation, gift tax, buy-sell agreements, tax returns, intestacy, generation-skipping transfer tax, and charitable deductions.

Key points include:
- Deductions from a decedent's gross estate, such as expenses and debts.
- Guardians for minors, including their roles and responsibilities.
- Real property ownership, including joint tenancy and community property.
- Contesting a will, including grounds such as forgery and lack of testamentary capacity.
- Irrevocable trusts, including the grantor's powers and tax implications.
- Asset valuation, including the alternate valuation date.
- Gift tax, including annual exclusions and trusts for minors.
- Buy-sell agreements, including their use in valuing closely held businesses.
- Tax returns, including the personal representative's duties.
- Intestacy, including the consequences of not having a will.
- Generation-skipping transfer tax, including exempt transfers.
- Charitable deductions, including qualified charities and deduction limits.

Answers to specific questions:
386. C. Expenses incurred for the benefit of individual heirs.
387. B. A guardian has equitable title to the property he administers for the minor.
388. D. In common-law states the total value of the property receives a stepped-up tax basis in the estate of the first spouse to die.
389. B. Community property loses its identity when a community-property couple moves to a common-law state.
390. D. The widow was bequeathed less than her intestate share.
391. C. add principal to the trust
392. D. Property distributed under the will within the alternate valuation period is valued at the date of death.
393. B. The father's annual gift tax exclusion must be reduced by any amount used to pay college tuition costs.
394. A. The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.
395. A. the surviving spouse's income tax return for the year of death
396. D. A surviving spouse receives only his or her elective share.
397. B. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.
398. D. The amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.