Monique, 61, created a custodial account and transferred $15,000 to the account for the benefit of her great-great grandchild, Tony, and named Tony's father, Luis, as the custodian. It is Monique's desire that the money be used for Tony's college education. Monique's last will and testament bequests all of her property to Luis for his lifetime, with the remainder to Tony. Monique's estate is currently valued at $2,300,000, but she expects to increase her estate through real estate investments over the next 10 years. Monique has previously used $1,000,000 of her generation-skipping transfer tax (GSTT) exemption on an indirect skip person. Which one of the following statements is CORRECT regarding the GSTT? A)The transfer of the $15,000 into the custodial account is statutorily exempt from GSTT since it is to be used for the payment of tuition expenses. B)The transfer pursuant to the last will and testament qualifies for the deceased parent skip rule. C)The transfer of the $15,000 into the custodial account is a direct skip. D)The transfer pursuant to the last will and testament is a direct skip.
Monique, 61, created a custodial account and transferred $15,000 to the account for the benefit of her great-great grandchild, Tony, and named Tony's father, Luis, as the custodian. It is Monique's desire that the money be used for Tony's college education. Monique's last will and testament bequests all of her property to Luis for his lifetime, with the remainder to Tony. Monique's estate is currently valued at $2,300,000, but she expects to increase her estate through real estate investments over the next 10 years. Monique has previously used $1,000,000 of her generation-skipping transfer tax (GSTT) exemption on an indirect skip person. Which one of the following statements is CORRECT regarding the GSTT? A)The transfer of the $15,000 into the custodial account is statutorily exempt from GSTT since it is to be used for the payment of tuition expenses. B)The transfer pursuant to the last will and testament qualifies for the deceased parent skip rule. C)The transfer of the $15,000 into the custodial account is a direct skip. D)The transfer pursuant to the last will and testament is a direct skip.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Monique, 61, created a custodial account and transferred $15,000 to the account for the benefit of her great-great grandchild, Tony, and named Tony's father, Luis, as the custodian. It is Monique's desire that the money be used for Tony's college education. Monique's last will and testament bequests all of her property to Luis for his lifetime, with the remainder to Tony. Monique's estate is currently valued at $2,300,000, but she expects to increase her estate through real estate investments over the next 10 years. Monique has previously used $1,000,000 of her generation-skipping transfer tax (GSTT) exemption on an indirect skip person. Which one of the following statements is CORRECT regarding the GSTT?
A)The transfer of the $15,000 into the custodial account is statutorily exempt from GSTT since it is to be used for the payment of tuition expenses.
B)The transfer pursuant to the last will and testament qualifies for the deceased parent skip rule.
C)The transfer of the $15,000 into the custodial account is a direct skip.
D)The transfer pursuant to the last will and testament is a direct skip.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education