CFP

Deferral And Minimization Of Estate Taxes - Answer Key

1. A

Since Scott died within three years of the ownership transfer, the life insurance proceeds will still be included in his gross estate. Life insurance proceeds are tax-free if paid directly to the beneficiary. No gift or generation-skipping transfer tax will be due.

2.
C

Shane can pass an unlimited amount of assets to his spouse with no gift tax, generation-skipping transfer tax, income tax or capital gain consequences.

3.
D

If Roger gifts more than $14,000 directly to any individual in 2013, he will expose himself to the gift tax. Payment of medical expenses for anyone in any amount directly to the medical facility is not taxed under the gift or estate tax.

4.
D

If Debby pays the tuition of the grandson directly to the college the amount is unlimited, but a direct gift to her grandson for college expenses cannot exceed $14,000 in 2013 to avoid gift taxes.

5.
B

Assets do not qualify for the marital deduction. They are taxed in the estate of the first spouse to die.




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