AC 561 Unit 1 Assignment Accounting Exercises (Kaplan)

CPET – Chapter 18

41. LO.5 Using property she inherited, Myrna makes a gift of $6.2 million to her adult daughter, Doris. The gift takes place in 2013. Neither Myrna nor her husband, Greg, has made any prior taxable gifts. Determine the gift tax liability if:

51. LO.6, 7 In 2000, Alan purchases a commercial single premium annuity. Under the terms of the policy, Alan is to receive $120,000 annually for life. If Alan predeceases his wife, Katelyn, she is to receive $60,000 annually for life. Alan dies first at a time when the value of the survivorship feature is $900,000.

52. LO.6 At the time of his death on July 9, 2013, Aiden was involved in the following real estate.

  Fair Market Value (on July 9, 2013)

Apartment building $2,100,000

Tree farm   1,500,000

Pastureland      750,000

Residence      900,000

59. LO.8 On the advice of her estate planner, Grace made taxable gifts of $5 million in 2011. Grace dies in late 2013 leaving a taxable estate of $1.1 million. Grace never made any taxable gifts before 2011. Determine her estate tax liability.

61. LO.9 In 2013, Loretta makes a taxable gift of $2 million to her granddaughter, Bertha. Presuming that Loretta used up both her unified transfer tax credit and her generation-skipping transfer tax credit, how much tax does Loretta owe as a result of the transfer?