Estate Planning Please provide little explanation with the answers. ............

Question

Estate Planning

Please provide little explanation with the answers. ...............................................................................................

1- Which of the following statements concerning powers of invasion are correct?

I. A five-and-five power may be added to a nonmarital trust without the trust assets being includible in the surviving spouse’s gross estate.

II. A five-and-five power may be added to a Q-TIP Trust.

III. The surviving spouse may be given the power to invade the entire corpus of a marital trust.

IV. The surviving spouse need not be given a power to invade principal under a power of appointment trust.

          A.      I and II only

          B.      II and III only

          C.     III and IV only

          D.     I, II, III, and IV

...............................................................................................

2- A father deeded a house as a gift to his son in 1994 but retained the right to live in the house for the remainder of his life. The father died recently. The following are relevant facts:

- The father bought the house in 1980 for $60,000.

- The fair market value of the property at the time of the gift in 1994 was $110,000.

- The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount.

- The fair market value of the property at the time of the father’s death was $245,000. The son sold the property 6 months after his father’s death for $250,000.

When the son sold the property he had a gain of:

(A) $5,000

(B) $135,000

(C) $140,000

          (D) $190,000

Explanation / Answer

Estate Planning Please provide little explanation with the answers. ............

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