TRUSTS
ESTATES
PLANNING
ADMINSTRATION
TAXATION
100
A legal entity created to hold assets on behalf of another person or entity
What is a Trust
100
Person who has died
Who is the decedent
100
Which of the following statements about simple trusts is correct?
A. All income must be distributed annually.
B. Principal may be distributed in the current year.
C. Charitable contributions are permissible.
D. They are treated as grantor trusts for income tax purposes.
All income must be distributed annually.
100
Someone who is legally or ethically bound to act in the best interest of another person.
What is a fiduciary
100
What income amount triggers an estate tax filing requirement?
Gross income of $600 or more
200
Person or entity names that receives money, property or other benefits when another person dies
What is a beneficiary
200
Form used to file a trust or estate tax return
What is Form 1041
200
This legal document specifies how a person's assets will be distributed after their death and can also name guardians for minor children.
What is a will
200
All trusts are required to obtain a separate tax identification number (EIN) and file a separate tax return (Form 1041)
True or False
False: Grantor trusts typically use the grantor's Social Security Number and the income is reported on the grantor's individual return.
200
Trusts and estates are generally entitled to a deduction for distributions of income made to their beneficiaries.
True or False
True
300
The four main types of trusts
Irrevocable, Revocable, Complex
and Simple
300
This term refers to the total value of a person's assets at the time of their death, before any deductions or taxes.
What is Gross estate
300
This type of trust allows a surviving spouse to receive income from the trust during their lifetime, while postponing estate taxes until their death — but gives no power to choose the final beneficiary.
What is a QTIP Trust
300
Which type of trust can help remove assets from a grantor's taxable estate and potentially reduce estate tax liability?
A. Revocable living trust
B. Irrevocable trust
C. Simple trust
D. Complex trust
Answer: B Irrevocable trusts can be used to remove assets from a grantor's estate, thus reducing potential estate tax liability.
300
Annual GIft tax exclusion for 2025.
what is 17,000
400
This type of trust is created through a will and only takes effect after the grantor's death.
What is a testamentary trust
400
This is the maximum federal estate tax exemption amount for 2025.
What is 12.92 million
400
the 3 types of REIT's
Equity REIT
Mortgage REIT
and Hybrid REIT
400
A taxpayer transfers a parcel of land with a fair market value of $200,000 and an adjusted basis of $50,000 to a revocable living trust. What is the basis of the land to the trust?
A. $0
B. $50,000
C. $200,000
D. $250,000
b. Assets transferred to a revocable living trust typically retain the grantor's basis.
400
A grantor trust is characterized by which of the following?
A. The trust is treated as a separate tax entity, responsible for paying its own income taxes.
B. The grantor has relinquished all control over the trust assets.
C. The trust is irrevocable, and the grantor cannot make any changes to it.
D. The grantor is treated as the owner of the trust assets for income tax purposes.
The grantor is treated as the owner of the trust assets for income tax purposes.
500
Real estate, bank accounts, investments, life insurance policies, business interests, or items of value
What are things that can be put into a trust.
500
The adjustment of an asset's cost basis to its fair market value at the time of the owner's death
(Hint: You have to do this when you walk up stairs)
What is the step up in basis rule
500
This is the term for the process of legally minimizing estate taxes through the use of trusts, gifts, and other strategies.
What is tax avoidance
500
Beneficiaries of simple trusts are always taxed on the income required to be distributed to them, regardless of whether it is actually distributed.
True or False
True
500
Which of the following expenses incurred by an estate are not subject to the 2% floor for miscellaneous itemized deductions?
A. Investment management fees
B. Appraisal fees for determining fair market value
C. Probate court fees and costs
D. Custodial fees
Probate court fees and costs