2312. CHAPTER 19—FAMILY TAX PLANNING Question TF #31 Jim makes a gift of property (basis of $800 000; fair market value of $600 000) to his wife Molly. Six months later Molly dies and under her will the property (now worth $700 000) returns to Jim. Jim’s income tax basis in the property now is $800 000. a. True b. False 2313. CHAPTER 19—FAMILY TAX PLANNING Question TF #32 If a traditional IRA is subject to both estate and income taxes a withdrawal by the heir constitutes income in respect of a decedent (IRD). a. True b. False 2314. CHAPTER 19—FAMILY TAX PLANNING Question TF #33 The special use valuation method of § 2032A is available for valuing transfers by gift. a. True b. False 2315. CHAPTER 19—FAMILY TAX PLANNING Question TF #34 Joan made taxable gifts of cash in 2009 and 2010. If Joan dies in 2011 for § 2032A purposes only the gift in 2010 is considered in meeting the special use valuation tests. a. True b. False 2316. CHAPTER 19—FAMILY TAX PLANNING Question TF #35 The Nelsons make gifts of appreciated securities to their dependent daughter (age 20) and son (age 21) both of which are students. If the children sell the securities shortly thereafter the kiddie tax will not apply to tax the gain at the parents’ tax rate. a. True b. False 2317. CHAPTER 19—FAMILY TAX PLANNING Question TF #36 Passing installment notes by death will not avoid any income tax on the deferred gain. a. True b. False 2318. CHAPTER 19—FAMILY TAX PLANNING Question TF #37 Neither the transfer by gift or by death avoids the recognition (for income tax purposes) of any deferred interest on U.S. savings bonds. a. True b. False 2319. CHAPTER 19—FAMILY TAX PLANNING Question TF #38 A gift of installment notes causes any deferred gross profit on the notes to be taxed to the donees. a. True b. False 2320. CHAPTER 19—FAMILY TAX PLANNING Question TF #39 If depreciable property is transferred by gift any depreciation recapture potential carries over to the donee. a. True b. False 2321. CHAPTER 19—FAMILY TAX PLANNING Question TF #40 If depreciable property is passed by death any depreciation recapture potential carries over to the heir. a. True b. False 2322. CHAPTER 19—FAMILY TAX PLANNING Question TF #41 Under Cindy’s will her share of their community property passes to Van her surviving spouse. Cindy’s property is notsubject to probate. a. True b. False 2323. CHAPTER 19—FAMILY TAX PLANNING Question TF #42 Harvey owns a certificate of deposit listed as: “Harvey payable on proof of death to April.” On Harvey’s prior death the CD is not subject to probate. a. True b. False 2324. CHAPTER 19—FAMILY TAX PLANNING Question TF #43 Paula owns an insurance policy on her life payable to her estate. On Paula’s death the insurance proceeds are included in her gross estate but not her probate estate. a. True. False 2325. CHAPTER 19—FAMILY TAX PLANNING Question TF #44 Walt owns an insurance policy on his life with Doris as the designated beneficiary. On Walt’s prior death the proceeds of the policy are part of his probate estate. a. True b. False 2326. CHAPTER 19—FAMILY TAX PLANNING Question TF #45 Ten years ago Austin purchased a residence listing ownership as tenants by the entirety with his wife Jean. In the current year Austin predeceases Jean. As to the residence nothing is included in Austin’s probate estate. a.True b. False
