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Q:1-The purpose of making a QTIP election after a decedent dies is to:
Mark one answer:
convert a future interest in property to a present interest.
qualify estate assets for the marital deduction.
secure an extension of time to pay the federal estate tax.
avoid the necessity of ancillary probate.

Q:2-When an estate elects to pay estate taxes in installments under Section 6166, estate tax payments attributable to a qualified closely-held business interest may be deferred up to:
Mark one answer:
5 years from the due date.
10 years from the decedent's date of death.
5 years from the decedent's date of death.
10 years from the due date.

Q:3-Which of the following describe(s) a reverse QTIP election?
i. A special election made by an executor to treat qualified terminable interest property as if the QTIP election had not been made for generation-skipping transfer tax purposes.
ii. An election that allows better utilization of a decedent's GSTT exemption.
Mark one answer:
I only.
Both I and II.
II only.
Neither I nor II.

Q:4-Which of the following Internal Revenue Code sections might be beneficial to an estate with a closely held corporation as a major asset of the estate?
1. Section 303.
2. Section 6166.
3. Section 2032.
4. Section 2032A.
Mark one answer:
1 only.
1, 2, 3, and 4.
1 and 2.
1, 2, and 3.

Q:5-Which of the following statements regarding Section 303 redemptions of stock to pay funeral and administrative expenses and death taxes is CORRECT?
Mark one answer:
The decedent's stock must represent more than 40% of the adjusted gross estate.
The gain is treated as ordinary income if the stock was held as a capital asset in the hands of the decedent.
The redemption is treated as a receipt of dividends.
The redemption is treated as an exchange and any gain is treated as a capital gain.

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Q:6-Which of the following statements regarding income in respect of a decedent (IRD) is CORRECT?
Mark one answer:
IRD receives a stepped-up basis at the decedent's death.
IRD is not included in the recipient's gross income.
IRD is usually not included in a decedent's gross estate.
IRD is gross income that a decedent was entitled to when alive but had not received.

Q:7-An estate elects to value property using the alternate valuation date. Subsequently, some property in the estate is sold after the date of death and before the alternate valuation date. Which of the following statements correctly identifies the valuation date for that property?
Mark one answer:
The property is valued as of the alternate valuation date.
The property is valued as of the date of sale.
The property is valued as of the last day of the month decedent died.
The property is valued as of the date of death.

Q:8-Which of the following estates could use the alternate valuation date to value estate assets for federal estate tax purposes?
i. An estate with an estate tax base of $10 million.
ii. An estate valued at $20 million in which all assets pass to the surviving spouse and qualify for the marital deduction.
Mark one answer:
Both I and II.
Neither I nor II.
I only.
II only.

Q:9-Which of the following actions should an executor take when developing a cash flow plan for an estate?
1. Determine which assets are the best candidates for sale if it appears necessary to sell estate property
2. Begin planning a strategy to make up any projected cash deficit
3. Account for the possibility of unexpected expenses
4. Explore ways of reducing the estate's cash needs by making special elections under the estate tax laws
Mark one answer:
1 and 3.
1, 2, 3, and 4.
2 only.
1, 3, and 4.

Q:10-Which of the following represent of income in respect of a decedent (IRD)?
1. Royalties earned by the decedent before death, but not yet paid.
2. Unpaid bonuses and salary.
3. Dividends on stock holdings declared before death but not yet paid.
4. Distributions from a qualified plan or IRA made after the decedent's death.
Mark one answer:
1 and 2.
1, 2 and 3.
1, 2, 3, and 4.
3, and 4.

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