19. A and B owned a home together as joint tenants. A died and then, two months later, Creditor obtained a judgment against A's estate. a. Creditor has valid rights in the home that was jointly owned by A and B. b. Creditor has no rights in the home that was jointly owned because, the moment A died, title

19. A and B owned a home together as joint tenants. A died and then, two months later, Creditor obtained a judgment against A's estate. a. Creditor has valid rights in the home that was jointly owned by A and B. b. Creditor has no rights in the home that was jointly owned because, the moment A died, title

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your client wants to purchase a residence for his aging parents, while minimizing the burden of ownership of the property for them and maximizing their enjoyment of it. Which one of the following states an advantage of titling the property in your client's name as sole owner rather than in joint tenancy with right of survivorship with his parents? A) The property will receive a step-up in basis when his parents die. B) The property will pass to his parents outside of probate. C) He will avoid gift tax liability by titling the property this way. D) His parents will have a life estate in the property if he predeceases them.
Randy established a trust, reserving in himself the power to terminate the trust if he is not satisfied with its operation. After two years, the power to terminate the trust expires. Randy transferred commercial real estate into the trust and specified that the income be payable annually for the benefit of his adult daughter, Michelle. Randy died one year after creation of the trust instrument. One estate tax implication for Randy of this trust is that the trust property is A) included in his estate because a family member is receiving a benefit from the trust. B) not included in his estate because a transfer for the benefit of a minor is exempt from tax. C) included in Randy's estate because he still had the power to terminate the trust at his death. D) not included in his estate because the power to terminate the trust eventually expires.
Which of the following is true with respect to the related party rules? a.A disallowed loss on a related party transaction can be used to offset any future gain when the property is sold to an unrelated party. b.Bill sells stock to his sister for a $3,000 loss. Bill can deduct the loss on his tax return. c.A taxpayer's uncle is a related party for purposes of Section 267. d.Under the constructive ownership rules of Section 267, a shareholder owns 10 percent of the stock owned by a corporation in which he or she is a shareholder. e.None of these choices are correct.
In 2001, Heather created a trust with income to her partner Gina for life, remainder to her daughter, Sonia, if living, and if Sonia is not living then to Heather if Heather is living, and if Heather is not living, then to granddaughter Beth or Beth's estate. In 2011, while all parties remain alive, Heather transfers her contingent interest to Beth, relinquishing all rights and interest in the property. In 2013, Heather dies, predeceasing Gina, Sonia, and Beth. What are Heather's estate tax consequences, if any? No Inclusion Inclusion in Grantor's gross estate pursuant to 2033 Inclusion in Grantor's gross estate pursuant to 2035 Inclusion in Grantor's gross estate pursuant to 2036 Inclusion in Grantor's gross estate pursuant to 2037 Inclusion in Grantor's gross estate pursuant to 2038
This year, Leron and Sheena sold their home for $1,036,000 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? Assume that the couple is married filing jointly. (Leave no answer blank. Enter zero if applicable.) Problem 5-81 Part-a (Algo) a. Leron and Sheena bought the home three years ago for $185,000 and lived in the home until it sold.
Lisa sells business property with an adjusted basis of $132,000 to her son, Alfred, for its fair market value of $105,600. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $__________ realized loss of which $___________is recognized. b. What is Alfred's recognized gain or loss if he subsequently sells the property for $145,200? For $85,800? If Alfred sells the property for $145,200, he has a recognized gain of $_______________. If Alfred sells the property for $85,800, he has a recognized loss of $_______________.
Assume Darrin transfers ownership of the life insurance policy on his life to an Irrevocable Life Insurance Trust (ILIT) and retains the right to borrow against the policy. Assume Darrin dies five years later. Which of the following is correct regarding the treatment of the proceeds of the life insurance policy? O The proceeds will always be included in Darrin's federal gross estate. The proceeds will be included in Darrin's federal gross estate if he has any outstanding loans against the life insurance policy. O The proceeds will be included in Darrin's federal gross estate if Darrin continued paying the policy premiums after the life insurance policy was transferred to the ILIT. O The proceeds will never be included in Darrin's federal gross estate.
Bonnie and Clyde jointly own their own home when Clyde defaults on credit card debt. To determine if Clyde is insolvent, how will the home play into the calculation?
Your client and his wife plan to purchase a new home. They want a form of property ownership that: will transfer title at death outside the probate process; will allow each spouse, while alive, to have a vested one-half interest in the property; guarantees that the surviving spouse will receive the property when the other spouse dies; and allows lifetime disposition by one spouse of their property interest without requiring the consent of the other spouse. Assuming that all the forms of ownership below are available in the state where the property is located, what is the form of titling that will best achieve all of their objectives? A) Community property B) Tenancy by the entirety C) Joint tenants with right of survivorship D) Tenants in common
45. Michelle lives in a state that allows use of a beneficiary deed to transfer property at death. She owns her home in her sole name. She wants this asset to go to Bertram, her only child, at her death. Which one of the following is a correct statement regarding use of a beneficiary deed in this situation? A) A beneficiary deed can only transfer personal property at death. B) She will incur gift tax if she records the deed. C) If she uses a beneficiary deed, she will not be able to live in the house until her death. D) If Bertram predeceases her, Michelle will be able to name another beneficiary to receive title to the home at her death.
38. Which of the following are interests that must go through probate? A residence that goes to the decedent's spouse and children according to the intestate succession statute Shares of stock bequested to the decedent's brother A bond that is community property, which passes to the surviving spouse Life insurance proceeds payable to the decedent's spouse