American College HS-330 Exam Questions & Answers

All the following transfers are subject to the generation-skipping transfer tax (GSTT) EXCEPT:

A. A distribution to a grandchild from a sprinkle trust created by a grandparent to benefit both skip and non-skip beneficiaries.

B. A direct cash gift of $50,000 from a grandparent to his grandchild if such grandchild's parents are still alive.

C. A direct cash payment of $28,000 from a grandparent to a private prep school to cover the tuition costs for her grandchild.

D. A termination of a trust at the death of the nonskip life income beneficiary with the remainder distributed solely to skip persons.

On January 1, 2004 a father gave his daughter a $50,000 straight (ordinary) life insurance policy on his life. Premiums are paid annually. The pertinent facts about the policy are:

Date of issue: July 1, 1992

-Premium paid on July 1, 2003 $800

-

Terminal reserve on July 1, 2003 5,000

-

Terminal reserve on July 1, 2004 6,000

A.

$5,800

B.

$50,000

C.

$5,900

D.

$5,400

Which of the following statements concerning guardians is (are) correct?

1.

A guardian is appointed by a court.

2.

A guardian holds equitable title to the property he administers for his or her ward.

A. Both 1 and 2

B. 2 only

C. Neither 1 nor 2

D. 1 only