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American College HS330 Exam Sample Questions

Question: 2

The following are facts concerning a decedent’s estate:

Taxable estate $1.700, 000

Pre-1977 taxable gifts 200, 000

Post-1976 adjusted taxable gifts 50, 000

Post-1976 gifts made to a qualified charity 100, 000

The tentative tax base of this estate is

A- $1,700,000

B- $1,750,000

C- $1,850,000

D- $1,900,000


Answer: B

Question: 4

A father and son have been farming land owned by the father for the past 12 years. Just prior to

his death, the father was offered $1200, 000 for his farm because of its possible use as a

shopping center. The son would like to continue to farm the land if it can be included in his

father’s estate at its current use value. Additional facts are:

1. Average annual gross rentals from nearby farms of similar acreage are $56,000.

2. Average annual state and local real estate taxes on the farm are $6,000.

3. The interest rate for loans from the Federal Land Sank is 8 percent.

For federal estate tax purposes, the farm method valuation formula would result in a current use

value for the farm of

A- $500,000

B- $600,000

C- $700,000

D- $820,000


Answer: B

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Question: 4

A father and son have been farming land owned by the father for the past 12 years. Just prior to

his death, the father was offered $1200, 000 for his farm because of its possible use as a

shopping center. The son would like to continue to farm the land if it can be included in his

father’s estate at its current use value. Additional facts are:

1. Average annual gross rentals from nearby farms of similar acreage are $56,000.

2. Average annual state and local real estate taxes on the farm are $6,000.

3. The interest rate for loans from the Federal Land Sank is 8 percent.

For federal estate tax purposes, the farm method valuation formula would result in a current use

value for the farm of

A- $500,000

B- $600,000

C- $700,000

D- $820,000


Answer: B

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Question: 5

Which of the following types of real properly ownership will be deemed to be a tenancy in

common?

A- Two brothers own equal amounts of all the common stock in a corporation, the only asset of

which is real property.

B- Two brothers own equal undivided interests in a piece of real properly, with each brother

being able to divest himself of his interest by sale, gift, or will.

C- Two brothers are equal partners in a general partnership that owns a piece of real property

used in the partnership business.

D- Two brothers own equal fractional interests in a piece of real property and at the death of one

of the brothers the survivor will own the entire piece of property.


Answer: B

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Question: 2

The following are facts concerning a decedent’s estate:

Taxable estate $1.700, 000

Pre-1977 taxable gifts 200, 000

Post-1976 adjusted taxable gifts 50, 000

Post-1976 gifts made to a qualified charity 100, 000

The tentative tax base of this estate is

A- $1,700,000

B- $1,750,000

C- $1,850,000

D- $1,900,000


Answer: B

Question: 4

A father and son have been farming land owned by the father for the past 12 years. Just prior to

his death, the father was offered $1200, 000 for his farm because of its possible use as a

shopping center. The son would like to continue to farm the land if it can be included in his

father’s estate at its current use value. Additional facts are:

1. Average annual gross rentals from nearby farms of similar acreage are $56,000.

2. Average annual state and local real estate taxes on the farm are $6,000.

3. The interest rate for loans from the Federal Land Sank is 8 percent.

For federal estate tax purposes, the farm method valuation formula would result in a current use

value for the farm of

A- $500,000

B- $600,000

C- $700,000

D- $820,000


Answer: B