20.3

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A ________ trust is created by a will. A) testamentary B) living C) bequeathed D) credit-shelter

a

For the purpose of avoiding estate taxes, estate planning involves all but A) a living will. B) trusts. C) gifts. D) contributions

a

Money donated from an estate to charitable organizations is A) not subject to estate taxes. B) added back into the value of an estate for tax purposes. C) an itemized deduction on the federal income tax return of the deceased. D) allowed a 50% credit against the value of the estate

a

The recipient of gift income within the allowable amount A) does not have to report gift income and is not subject to taxes. B) does have to report gift income and is subject to gift taxes. C) is taxed at the capital gains rate. D) is taxed at the ordinary income rate

a

A legal document in which one person transfers assets to another who manages them for designated beneficiaries is called a(n) A) testamentary. B) trust. C) will. D) codicil

b

A person who manages assets for designated beneficiaries is called a A) witness. B) trustee. C) grantor. D) executor

b

In which of the following do you no longer own the assets of the trust? A) Revocable living trust B) Irrevocable living trust C) Standard family trust D) Credit shelter trust

b

A tax-free gift of up to ________ per year can be given to another person. A) $1,000 B) $5,000 C) $13,000 D) $20,000

c

A(n) ________ trust is one that cannot be changed. A) revocable B) living C) irrevocable D) standard family

c

The giving of annual individual gifts up to the allowable amount is especially important for A) those without a will. B) people in high income tax brackets. C) people whose estate value exceeds the tax-free limit. D) those with smaller estates.

c

The person who establishes and funds a trust is known as the A) executor. B) administrator. C) grantor. D) testator

c

A married couple with four children may give gifts up to ________ each year to their children. A) $44,000 B) $66,000 C) $88,000 D) $104,000

d

A standard family trust is all of the following except A) it is established for children in a family. B) it is created by wills. C) it is used to minimize taxes. D) it is a living trust

d

Which of the following is not a type of trust? A) Revocable living trust B) Living trust C) Standard family trust D) Income trust

d


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