ACC 630 Milestone Three

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Question 12 of 30.Who is required to issue Schedule K-1 (Form 1041) for a nongrantor trust?O The grantor.Each beneficiary.O The trustee.The IRS.OMark for follow up2.

Which of the following are nontax characteristics of a qualified terminable interest property (QTIP) trust? The income may go to multiple beneficiaries. The donor or decedent's executor qualifies the trust assets for the marital deduction by making a timely election The principal of the trust is paid to the surviving spouse's estate if the election to qualify the assets for the marital deduction was not made upon creation of the trust. The grantor of the trust determines who receives the remainder interest in the trust assets.   A)II, III, and IV   B)I and III   C)IV only   D)II and IV

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Question 14 Which of the following statements is most correct about the $5,000 or 5% (5x5) rule?     It converts a future interest gift into a present interest gift.     It eliminates estate taxation in the grantor's estate for lifetime gifts to a trust.     The rule prevents a release or lapse of a power of appointment from being taxed as a gift if it meets the requirements of the rule.     The rule states that if a trust distributes no more than the greater of $5,000 or 5% of the trust corpus to any beneficiary, that amount will not be subject to the income tax when received by the beneficiary   Question 15 Donald puts a lot of money into a bucket and gives Melania a power of appointment over the money in the bucket. Melania has the power to distribute that money to any other human being on the planet except herself, her creditors, her estate, or her estate's creditors. What is the correct name for her power of appointment? It is a/an:     General…

Which of the following is a characteristic of a fixed trust? Select one:The trustee usually has discretion as to the timing of the distribution.Beneficiaries can compel payment of amounts to which they are presently entitled.All of the above are characteristics of fixed trusts.If the trustee has determined to distribute income to a beneficiary, actual receipt of that income is not required for it to be assessable for income tax purposes.None of these

20) The party to which legal title and management responsibilities are initially given in a trust agreement is referred to as the 1 trustee 2. remainderman. 3 grantor. 4 beneficiary.

Question 21 Which of the following is the best evidence of continuous ownership of property? a. Examination of canceled check in payment for the property. b. Examination of the deed. Oc. Examination of the title policy. Od. Examination of the client's property tax bills. 4

What type of accrual method (cash, modified, full, governmental, GASB accrual) is to be used to report transaction in Private Purpose Trusts? Answer:

19. If an individual renders services to a creditor who in consideration thereof cancels the debt, the cancellation of indebtedness may,amount to a: a. Gift С. Donation inter vivos b. Capital contribution d. Payment of income CS Scanned with CamScanner

Ch 13 Ensuring that plans operate in accordance with plan documents and ERISA, diversifying pension fund assets to minimize the risk of large losses, and managing benefit plans and funds solely in the interest of plan beneficiaries are all fiduciary duties under ERISA. True False