1. Which of the following concerning the GSTT is TRUE?

A) The GSTT annual exclusion amount is $1 million for the 2013 tax year.
B) The GSTT gift is also subject to the gift tax.
C) A great-grandchild would not be considered a skip-beneficiary to the great-grandfather.
D)
The GSTT is not imposed on direct skips.

2. All of the following are true statements concerning the GSTT EXCEPT:

A) The GSTT is in addition to an estate and gift taxes.
B)
The maximum GSTT rate of tax is 40%.
C)
GSTT transfers do not apply to bequests.
D)
For 2013, each taxpayer is given a $5,250,000 GSTT exemption.

3. Beverly, age 68, decides to make several gifts from her estate in 2013. Which of the following gifts are subject to the GSTT?

A) $60,000 to the daughter (age 12) of her best friend.
B)
$14,000 to her granddaughter (age 19) for a car.
C)
$50,000 to her niece (age 10) to go to Europe.
D) $100,000 paid directly to Harvard University for her grandson's business school tuition.

4. James and Judy are both 72 years old. They have two children (Allen and Aaron). Allen had two children with his first wife Betty (age 50), and their names are Tom and Tanya. Allen died in an automobile accident a few years back while both of his children were in college. Since that time, they both live with Betty. Judy has a $5 million life insurance policy. Which of the following are TRUE statements as they apply to James and Judy?

(1) The grandchild, Tom, is a skip beneficiary.
(2) James gets a $5 million GSTT exclusion that can be carried over to Judy in the event of his death.
(3) Judy can gift $10,000 to each child and grandchild without any GSTT liability.
(4) Aaron is a non-skip beneficiary.
(5) Judy can gift $14,000 to Betty without any GSTT liability.

A) 1, 3 and 5 only
B)
2, 3 and 4 only
C)
1 and 4 only
D) 3, 4 and 5 only

 

Answer Key

Related Articles
  1. Taxes

    How to Avoid Gift Taxes

    For most, the answer to the question, “How much is the gift tax?” can be “nothing."
  2. Taxes

    What Are Gift Taxes?

    If you're not sure what gift taxes are, read on and we'll explain.
  3. Insights

    Gift-Giving Etiquette

    Here's a look at how much you should spend and what you should give this holiday season.
  4. Retirement

    4 Thoughtful Retirement Gift Ideas for Men

    This"best gifts list" of the most thoughtful retirement gifts for men includes items appropriate as gifts from co-workers, friends or family members.
  5. Insights

    Will Your Gift Card Gift Go Unused?

    An unbelievable amount of money gets wasted in the form of non-redemption: nearly $5 billion a year. These tips will ensure that your gift card gift doesn't go to waste.
  6. Personal Finance

    Top Websites For Discounted Gift Cards

    Gift cards can cost less when you buy them through a discount website. Just do the math before you cough up the cash.
  7. Personal Finance

    How To Get Gift Cards At A Discount

    Use these tips whether you're buying someone a gift or just want to score a discount at your favorite stores.
  8. Investing

    The Fundamental Mechanics Of Investing

    Here's a story that demonstrates why stocks and bonds were created and how they are valued.
  9. Insights

    Gifts For People You Aren't That Close To

    Finding a gift for a new boyfriend or girlfriend, your boss, or the postman can sometimes be a challenge.
  10. Taxes

    7 Sources Of Nontaxable Income

    All income in the United States is taxable, unless a provision specifically excludes it. Here are seven of those exceptions.
Frequently Asked Questions
  1. What's the Best Way to Contact Warren Buffett?

    Learn how to contact Warren Buffett and what kinds of contact is most likely to receive a response from him or from his company, ...
  2. What is the Financial Services Sector?

    A diverse group of companies, beyond banks and credit unions, comprises the financial services sector.
  3. Who are Whole Foods' (WFM) main competitors?

    Whole Foods' main competitors are Sprouts Farmers Markets and Trader Joe's. However, the recent acquisition by Amazon my ...
  4. What caused the Stock Market Crash of 1929 that preceded the Great Depression?

    Find out what led to the stock market crash of 1929, which in turn led to the Great Depression. It sparked a nearly 90% loss ...
Trading Center