Question

Question1 Paula receives a liquidating distribution from Pell as part of a redemption of all of its stock. Paula’s basis for her Pell stock is $10,000. In exchange for her stock, Paula receives property with an $8,000 basis and a $15,000 fair market value that is subject to a $2,000 mortgage, and also receives cash of $5,000. How much is Paula’s recognized gain? A. $12,000. B. $10,000. C. $8,000. D. $0.

Question 2 Paula receives a liquidating distribution from Pell Corporation. Paula’s basis for her Pell stock is $10,000. In exchange for her stock, Paula receives real estate with an $8,000 basis and a $15,000 fair market value that is subject to a $2,000 mortgage. What is Paula’s basis in the real estate she received? A. $13,000. B. $8,000. C. $15,000. D. $10,000. D. Babb: $400,000; Linda: $120,000.

Question 3 Oliver gave his wife $5,250,000 worth of publicly traded stock in August 2017, outright. Oliver's basis in the stock was $50,000. What is the amount of the taxable gift for federal gift tax purposes? (Oliver made no other gifts to anyone in 2017). A. 0. B. $87,000. C. $100,000. D. $5,087,000.

Question 4: Louise, who died in January 2, 2016, was survived by her husband, Larry. Louise’s gross estate was equal to $6,000,000 on the date of death. When Louise died, Louise and Larry owned an undeveloped parcel of real estate in Ocala. The fair market value of the land on the date of Louise's death was $750,000. Larry provided all of the consideration for the purchase of the land, paying $200,000 for it in 2012. Alternate valuation is not available to Louise’s estate as all assets owned by Louise will pass, either under Louise’s last will and testament or by operation of law, to Larry and hence, no estate tax will be due because of the marital deduction. What is the amount, if any, includible in Louise's gross estate for federal estate tax purposes with respect to the land? A. 0. B. $200,000. C. $375,000. D. $750,000.

Question 5. At his death on February 1, 2018, Nick owned the following property: Land held by Nick and his sister Ellen, as joint tenants with right of survivorship. The fair market value of the land on the date of Nick’s death was $600,000, and the land was purchased by Nick for himself and his sister 20 years before his death for $150,000.   

Land held by Nick and Amy as tenants by the entirety. The fair market value of the land on the date of Nick’s death was $800,000, and the land was purchased by Amy for Nick and Amy five years before Nick’s death for $450,000. A one-half undivided interest in land held with Nick’s brother, Lance as tenant in common. The fair market value of the land on the date of Nick’s death was $400,000, and the records demonstrate that the land was purchased by Lance for Nick and Lance four years before Nick’s death for $300,000.   

City of Dayton bonds worth $500,000 purchased by Nick five years before his death, and titled in Nick’s sole name. What amount is includible in Nick’s gross estate assuming alternate valuation is not available to Nick’s estate?

A.        $800,000.

B.        $1,100,000.

C.        $1,200,000.

D.        $1,700,000.

Answer 1

Answer:-1 - C) $8,000

Particulars			Amount
Fair Market Value of Property			$15,000
Less:- Mortgage Value			$2,000
			$13,000
Add: Cash			$5,000
			$18,000
Less:- Stock Value			$10,000
		Gain	$8,000

Answer:-2 - A) $13,000

It will be Net Fair market Value of Real Estate i.e. (Market Value - Mortgage Amount)= $15,000 - $ 2,000= $ 13,000

Answer:-3 - A) $0

An Individual can give an unlimited amount of gift to spouse without attracting Gift Tax. In case of spouse is not an U S citizen then gift is exempted up to $ 1,49,000 in a year.

answered by: anonymous