Q:2-When Leah dies, she owes $5,000 in unpaid medical expenses. Which of the following statements concerning the tax treatment of these expenses is CORRECT?
Mark one answer:
The medical expenses are deductible on either the federal estate tax return (Form 706) or on Leah's final Form 1040.
The medical expenses are deductible only on Leah's final Form 1040.
The medical expenses are deductible only on the federal estate tax return (Form 706).
The medical expenses are not deductible on either the federal estate tax return (Form 706) or on Leah's final Form 1040.
Q:3-Ordinary and necessary administration expenses paid by the fiduciary of an estate are deductible:
Mark one answer:
on either the fiduciary income tax return (IRS Form 1041) or the federal estate tax return (IRS 706), but not on both.
on both the fiduciary income tax return (IRS Form 1041) and on the estate tax return (IRS Form 706) by adding a tax computed on the proportionate rates attributable to both returns.
only on the federal estate tax return (IRS Form 706) and never on the fiduciary income tax return (IRS Form 1041).
only on the fiduciary income tax return (IRS Form 1041) and never on the federal estate tax return (IRS Form 706).
Q:4-Which of the following statements regarding a Section 303 stock redemption of a closely-held corporation is(are) CORRECT?
i. The estate usually recognizes little or no gain on the sale.
ii. The transaction is treated as a sale rather than a dividend for income tax purposes.
Mark one answer:
Neither I nor II.
II only.
I only.
Both I and II.
Q:5-When Ed died, his will left all of his assets to his best friend, Mark, and nothing to his wife, Martha. However, a state law allowed Martha to claim one-third of Ed's estate even though his will left her nothing. This is an example of:
Mark one answer:
electing against the will.
filing a qualified disclaimer.
a homestead exemption.
the family allowance.