Ana creates an irrevocable trust funding it with $400,000 worth of securities. By the terms of the trust. Ana must receive all the income from the trust on basis on her death the remainder is to pass to her two children in equal shares. The value of Ana's life income interest is: 1. determined by backing out the actuarial value of the remainder interest from the fair market value of the trust property as a whole. 2. determined by computing the present value of the life income interest. 3.50. 4.$400,000 01 02 09
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- Donna Stober’s estate has the following assets (all figures approximate fair value): The house, cash, and other assets are left to the decedent’s spouse. The investment land is contributed to a charitable organization. The automobiles are to be given to the decedent’s brother. The investments in stocks and bonds are to be put into a trust fund. The income generated by this trust will go to the decedent’s spouse annually until all of the couple’s children have reached the age of 25. At that time, the trust will be divided evenly among the children. The following amounts are paid prior to distribution and settlement of the estate: funeral expenses of $20,000 and estate administration expenses of $10,000. What value is to be reported as the taxable estate for federal estate tax purposes?Celine is married to Willy. This year Celine transfers $500,000 into an irrevocable trust with the income to be paid annually to Willy for ile (a life estate) and the remainder to Jenny Calculate the amount of Celine's taxable gifts from the transfers. Anours of favatieD creates a trust to last for 10 years, with income to D for the 10 year period and at the end of 10 years, remainder to X or X's estate. In Year 8 the trust is worth $ 5,000,000 and D's life estate is worth $ 2,000,000. In that year D sells his life estate to the trust for its $ 2,000,000 actuarial value and dies 2 years later. Assuming the trust had a value of $ 6,000,000 at D's death, the amount of trust property includible in D's gross estate, if any, is:
- 1. In 2021, Donald transferred $150,000 to an irrevocable trust that pays equal shares of income each year to three nephews (or their estates) for the next five years. At that time, the trust is terminated, and the corpus of the trust reverts to Donald. While showing all work, determine the amount, if any, of the current gifts and the taxable gifts. You may assume that the relevant interest rate is 6 percent and Donald is unmarried.Maxine agrees to purchase Jacob's property utilizing a private annuity. Jacob's table life expectancy is ten years at the date of the agreement, and the property has a fair market value of $400,000. The private annuity payment is $45,000 per year, and Maxine dies after making two payments. At Maxine's death, what amount is included in her gross estate with regards to the private annuity and the transferred property? $0 $90,000 $310,000 $400,000Richard placed his portfolio of income-producing stock valued at $200,000 into an irrevocable trust. The trust provides that the trustee is to pay to Richard 7% of the initial value of the trust annually for a period of 12 years. After the 12-year term, the trustee is directed to pay the remaining assets in the trust to Richard's daughter. Which of the following are CORRECT statements regarding the income, gift, or estate tax implications of this trust arrangement? Richard will owe a gift tax based on the present value of the remainder interest given to his daughter. Taxation of the income earned by this trust will be affected by the grantor trust rules. If Richard dies during the 12-year term of the trust, the trust assets will be included in his gross estate. The right that Richard has retained in this trust is considered to be "qualified" for purposes of the Chapter 14 rules. A) II and IV B) I and III C) I, II, III, and IV D) I and IV
- Anton creates an irrevocable trust for his children with a transfer of income-producing property and an insurance policy on the life of Celine, his wife. During the year, the trustee uses $4,800 of the trust income to pay the premiums on the policy covering Celine's life. (Anton, Celine, children or the trust) is taxed on $4,800 of the trust's income.Johnson transfers $500,000 of securities to an irrevocable trust, which is to pay him an income interest equal to five percent of the trust value determined each year for a term of 15 years. At the end of the 15-year term the remainder of the property shall pass to St. Philip's Hospital for Children. This is an example of what kind of trust? 1. A grantor retained income trust. 2. A charitable lead trust. 3. A charitable remainder unitrust. 4. A charitable remainder annuity trust. 01 02 03 04Your client is terminally ill. Her potential gross estate, valued at $12.9 million, includes the following assets: A life insurance policy on her life, with a death benefit of $500,000; her deceased husband is the named beneficiary A general power of appointment (valued at $500,000) over the assets of a trust established by her husband; her children are the designated remaindermen of the trust A $500,000 retained life estate in the family residence Your client also expects to receive a $500,000 bequest within the next four months from her deceased sister's estate; the client's children are the contingent beneficiaries of the bequest. Your client would like to transfer a portion of her estate to her two children while she is alive to reduce her potential estate tax liability to the greatest extent possible. Which one of the following exclusion techniques would be the most appropriate to reduce the value of your client's potential gross estate? A)disclaim the inheritance before…