Study Unit 14: Estate Tax

1. Chester is preparing the estate tax return, Form 706, for his deceased brother John. John died December 15 of the current year. Which of the following will NOT be included in John’s gross estate?

Real estate that will be passed to John when his parents die.

Stocks and bonds owned by John at his death.

Land that John had signed a contract to sell, but the sale of which was not completed.

Property jointly owned by John and his spouse.

2. Candace died on January 20, 2025. The assets included in her estate were valued as follows:

	1/20/2025	7/20/2025	10/20/2025
House	$13,000,000	$12,900,000	$12,700,000
Stocks	12,850,000	12,700,000	13,000,000

The executor sold the house on October 20, 2025, for $12,700,000. The alternate valuation date was properly elected. What is the value of Candace’s estate?

$25,850,000

$25,700,000

$25,600,000

$25,400,000

3. John, who was not married, died on October 12, 2025. He did not leave any of his assets to charity. Given the following information, may the executor of the estate make the alternate valuation election and, if so, what is the value of the gross estate on the alternate valuation date?

	FMV Date of Death	FMV Alternate Valuation
Residence	$16,000,000	$16,010,000
Installment note	5,000	500
Stock	600,000	350,000
Expenses	(450,000)	(300,000)

No, the election cannot be made.

Yes, the election can be made. The alternate value of the gross estate is $16,350,500.

Yes, the election can be made. The alternate value of the gross estate is $16,360,500.

Yes, the election can be made. The alternate value of the gross estate is $16,365,000.

4. After Mary died on June 30 of the current year, her executor identified the following items belonging to her estate:

Personal residence with a fair market value of $400,000 and an existing mortgage of $100,000
Certificate of deposit in the amount of $150,000 of which $10,000 was accrued interest payable at maturity on August 1
Stock portfolio with a value at date of death of $2,000,000 and a basis of $500,000
Life insurance policy, with her daughter named as an irrevocable beneficiary, in the amount of $150,000

Assuming that no alternate valuation date is elected, what is the gross value of Mary’s estate?

$2,700,000

$2,090,000

$2,550,000

$2,450,000

5. Following are the fair market values of Wald’s assets at the date of death:

Personal effects and jewelry	$ 2,298,000
Land bought by Wald with Wald’s funds 5 years prior to death and held with Wald’s sister as joint tenants with right of survivorship	11,490,000

The executor of Wald’s estate did not elect the alternate valuation date. The amount includible as Wald’s gross estate in the federal estate tax return is

$2,298,000

$7,660,000

$11,490,000

$13,788,000

6. Carl died on June 1, 2025. After determining that an estate tax return will be required, his executor decided to use the alternate valuation date for valuing the gross estate. Which of the following dates will be the alternate valuation date?

April 15, 2026.

December 31, 2025.

December 1, 2025.

On or before the due date of the United States Estate Tax Return.

7. Which of the following items are included in a decedent’s gross estate?

The decedent’s IRA, where the decedent’s spouse is the named beneficiary.
A checking account with the decedent’s daughter as a joint tenant. The daughter’s funds were used to set up the account.
Assets held in the decedent’s revocable grantor trust.

All of the assets are included in the decedent’s estate.

The IRA and checking account are included in the decedent’s estate.

The IRA and the assets in the revocable grantor trust are included in the decedent’s estate.

None of the assets are included in the decedent’s estate.

8. When Lisa’s husband died in 2022, a qualified terminable interest property (QTIP) trust he had set up, named Lisa as the beneficiary for her life. Lisa died in 2025. Given the following information, determine the value of Lisa’s gross estate:

	FMV at Date of Death
Lisa’s revocable grantor trust	$ 750,000
QTIP trust	1,000,000

$750,000

$1,000,000

$1,750,000

9. A decedent’s gross estate includes the value of all property to the extent of the decedent’s interest in the property at the time of death. Which one of the following items is NOT included in the gross estate?

Medical insurance reimbursements that were due the individual at death.

The value of the part of a deceased husband’s real property allowed to his widow for her lifetime (dower interest).

Proceeds of life insurance on the decedent’s life if the decedent possessed incidents of ownership in the policy.

Outstanding dividends declared to the decedent after the date of death.

10. Sam is single. Given the following information, determine the value of Sam’s gross estate:

	FMV at
	Date of Death
Cash	$ 15,000
Life insurance on Sam’s life (payable to his estate)	200,000
Jointly owned property (percentage includible-100%)	100,000

$315,000

$115,000

$265,000

$65,000

11. Given the following information, determine the value of Sara’s gross estate:

	FMV at
	Date of Death
Beneficiary for life of a QTIP trust (qualified terminable interest property)	$2,000,000
Irrevocable trust (Sara was the grantor, but retained no interest in the trust)	1,000,000
Revocable grantor type trust (Sara was the grantor)	500,000

$2,500,000

$3,500,000

$500,000

$3,000,000

12. Mrs. Flame passed away on March 15, 2025. The assets included in her estate were properly valued as follows:

	3/15/2025	7/15/2025	9/15/2025
Personal residence	$14,500,000	$14,600,000	$14,700,000
Stocks held	2,000,000	1,700,000	1,750,000

The executor sold the home on July 15, 2025, for $14,600,000. The alternate valuation date was properly elected. What is the value of the estate reported for estate tax purposes?

$16,450,000

$16,500,000

$16,350,000

$16,300,000

13. Mr. C died on June 30 of the current year. Based on the following facts, compute Mr. C’s gross estate:

Last year, C gave cash of $50,000 to his friend. No gift tax was paid on the gift.
C held property jointly with his brother. Each paid $30,000 of the total purchase price of $60,000. Fair market value of the property at date of death was $100,000.
Two years ago, C purchased a life insurance policy on his life and gave it as a gift to his sister. C retained the right to change the beneficiary. Upon C’s death, his sister received $150,000 under the policy.
Ten years ago, C gave his son a summer home (fair market value when gifted was $125,000). C continued to use it until his death pursuant to an understanding with his son. Fair market value at date of death was $175,000.

$200,000

$250,000

$375,000

$425,000

14. Mr. Park died on December 1 of the current year. The alternate valuation method was not elected. The assets in his estate were valued as of the date of death as follows:

Home	$5,400,000
Car	30,000
Stocks, bonds, and savings	350,000
Jewelry	25,000
Dividends date of record November 15, not paid as of December 1	5,000
Accrued interest on savings as of December 1	2,500
Life insurance (proceeds receivable by the estate)	300,000

What is the amount of Mr. Park’s gross estate?

$6,112,500

$6,110,000

$6,105,000

$5,812,500

15. Harry, a single person, died in 2025. The executor does not elect the alternate valuation date. Given the following information, determine the value of Harry’s gross estate.

Assets of the Estate	FMV at Date of Death
Certificates of deposit	$ 100,000
Mortgage receivable on sale of property	2,000,000
Paintings and collectibles	500,000
Income tax refund due from 2024 individual tax return	30,000
Household goods and personal effects	20,000

$2,600,000

$2,650,000

$2,620,000

$2,120,000

16. John, a single taxpayer, died on March 3, 2025. Based on the following information, determine the value of John’s gross estate.


	FMV at Date of Death
Life insurance on John’s life
(payable to John’s estate)	$1,250,000
John’s revocable grantor trust	1,700,000
Stock given to John’s son
in 2024 (no gift tax was paid)	50,000

$1,250,000

$1,700,000

$2,950,000

$3,000,000

17. Which of the following statements concerning the alternate valuation election is true?

The alternate valuation election may be made even if no estate tax will be paid if the election is not made.

If the alternate valuation election is made, it is possible for some but not all of the assets to be included in the decedent’s estate at a higher FMV than on the date of death.

If the alternate valuation election is made, assets that are disposed of within 6 months of the decedent’s death are generally valued on the date of death.

None of the statements are true.

18. Which of the following provisions regarding the election of the alternate valuation method for property included in the decedent’s gross estate is false?

Dividends that were declared before the decedent’s death but paid within the 6-month alternate valuation period are included in the gross estate.

Property affected by mere lapse of time is valued as of the date of death with adjustments for differences in value 6 months after death that are not due to mere lapse of time.

The election may be made only if it will increase the value of the gross estate and the sum of the estate tax and the generation-skipping transfer tax (reduced by any allowable credits).

The alternate valuation date is only a method of placing a value on the property in an estate. It does not affect the property that must be included in the estate.

19. Ms. Pub died on February 28, 2025. The assets that comprised her estate were valued as follows:

	2/28/2025	6/28/2025	8/28/2025
House	$12,000,000	$11,900,000	$11,800,000
Stocks	3,950,000	3,975,000	3,875,000
Bonds	1,500,000	1,500,000	1,540,000

The executor sold the home on June 28, 2025, for $11,900,000. The executor properly elected the alternate-valuation-date method. What is the value of Ms. Pub’s estate?

$17,215,000

$17,315,000

$17,375,000

$17,450,000

20. Laura’s gross estate equals $16,000,000. Given the following information, determine Laura’s taxable estate:

Charitable contribution specified in Laura’s will	$100,000
Funeral expenses	10,000
Medical expenses claimed on Laura’s Form 1040	20,000

$15,870,000

$15,880,000

$15,890,000

$16,000,000

21. Sara, a cash-basis taxpayer, died September 30, 2025. Assume the following details regarding the assets of her estate:

Sara’s home was appraised for $14,500,000 at the date of her death and sold on March 15, 2026, for $14,450,000.
Sara had a time certificate in the amount of $100,000. The certificate was redeemed for funeral expenses on October 1, 2025. (Ignore interest for purposes of this question.)
Sara had common stock valued at $350,000 at the date of death. On the alternate valuation date, the stock was valued at $250,000.
Sara had personal and household furnishings that were appraised at $25,000 as of the date of death. The executor gave all of the items to a charity on November 1, 2025.

If the alternate valuation date is elected, what is the gross value that must be reported?

$14,825,000

$14,925,000

$14,975,000

$14,875,000

22. Which of the following provisions regarding the election of the alternate valuation method for property included in the decedent’s gross estate is false?

The election must be made on a return filed within 1 year of the due date, including extensions, for filing the return.

The election may be changed after filing the return by filing an amended return.

The election may be made only if it will decrease the value of the gross estate and the sum of the estate tax and the generation-skipping transfer tax (reduced by any allowable credits).

The election applies to all of the property in the estate and does not preclude the election of the special-use valuation for qualified real property.

23. Ellie died on June 15 of the current year. The assets in her estate were valued on her date of death and alternate valuation date, respectively, as follows:

Asset	Date-of-Death Valuation	Alternate Valuation
Home	$18,250,000	$18,300,000
Stock	425,000	450,000
Bonds	200,000	125,000
Patent	100,000	95,000

The patent had 10 years of its life remaining at the time of Ellie’s death. The executor sold the home on August 1 of the current year for $18,275,000. If Ellie’s executor elects the alternate-valuation-date method, what is the value of Ellie’s estate?

$18,895,000

$18,945,000

$18,950,000

$18,970,000

24. Jason died on October 1, 2025. The alternate valuation method was not elected. The assets in his estate were valued as of the date of death as follows:

Home	$ 300,000
Car	20,000
Stocks, bonds, and savings	1,750,000
Jewelry	50,000
Dividends declared July 1, 2025,
not paid as of October 1, 2025	1,000
Accrued interest on savings as
of October 1, 2025	6,500

What is the amount of Jason’s gross estate?

$2,070,000

$2,120,000

$2,121,000

$2,127,500

25. Mr. Duffy died on October 1, 2025. The alternate valuation method was not elected. The assets in his estate were valued as of the date of death as follows:

Home	$ 300,000
Car	20,000
Stocks, bonds, and savings	1,700,000
Jewelry	40,000
Dividends declared July 1, 2025
not paid as of October 1, 2025	1,000
Accrued interest on savings as
of October 1, 2025	2,000

What is the amount of Mr. Duffy’s gross estate?

$2,060,000

$2,061,000

$2,062,000

$2,063,000

26. Which of the following items of property would be included in the gross estate of a decedent who died in the current year?

Clothes and jewelry of the decedent.
Cash of $400,000 given to the decedent’s friend 3 years ago. No gift tax was paid on the transfer.
Land purchased by the decedent and held as joint tenants with rights of survivorship with the decedent’s brother.

I, II, and III.

I and III.

I and II.

II and III.

27. Mr. X died on September 24 of the current year. His will required the transfer of all possessions to his sister. At the date of death, the assets transferred were

	Adj. Basis	FMV
Apartment house	$275,000	$420,000
Stock	525,000	540,000
Dividends on above stock
(declared September 30)	3,000	3,000
Medical insurance reimbursement
(check received September 20
but not cashed)	5,000	5,000
Cash	50,000	50,000

The executrix of Mr. X’s estate did not elect the alternate valuation date. What is Mr. X’s gross estate for purposes of an estate tax return, Form 706?

$858,000

$1,030,000

$1,015,000

$1,018,000

28. Proceeds of a life insurance policy payable to the estate’s executor, as the estate’s representative, are

Includible in the decedent’s gross estate only if the premiums had been paid by the insured.

Includible in the decedent’s gross estate only if the policy was taken out within 3 years of the insured’s death under the contemplation-of-death rule.

Always includible in the decedent’s gross estate.

Never includible in the decedent’s gross estate.

29. If the executor of a decedent’s estate elects the alternate valuation date and none of the property included in the gross estate has been sold or distributed, the estate assets must be valued as of how many months after the decedent’s death?

30. Which of the following statements about the alternate valuation date for valuing property included in the decedent’s gross estate is false?

The election applies to all of the property in the estate other than property for which the special-use valuation applies.

Property affected by mere lapse of time is valued at the date of death and includes those properties affected by the time value of money.

If the alternate valuation date is elected, property disposed of within 6 months after the decedent’s death is valued as of the date of disposition.

Property not disposed of within 6 months after the decedent’s death is valued as of 6 months after the decedent’s death.

31. With regard to the federal estate tax, the alternate valuation date

Is required to be used if the fair market value of the estate’s assets has increased since the decedent’s date of death.

If elected on the first return filed for the estate, may be revoked in an amended return provided that the first return was filed on time.

Must be used for valuation of the estate’s liabilities if such date is used for valuation of the estate’s assets.

Can be elected only if its use decreases both the value of the gross estate and the sum of the estate tax and the generation-skipping transfer tax (reduced by any allowable credits).

32. Mr. James died on October 1 of the current year. The alternate valuation method was not elected. The assets in his estate were valued as of the date of death as follows:

Home	$300,000
Car	20,000
Stocks, bonds, and savings	650,000
Jewelry	35,000
Dividends declared July 1,
not paid as of October 1	1,000
Accrued interest on savings
as of October 1	6,500

What is the amount of Mr. James’s gross estate?

$970,000

$1,005,000

$1,006,000

$1,012,500

33. Ed died on November 1 of the current year. The alternate valuation method was not elected. The assets in his estate as of the date of death were as follows:

Home	$300,000
Life insurance (proceeds
receivable by the estate)	800,000
Stocks, bonds, and savings	150,000
Jewelry	25,000
Car	15,500
Accrued interest on savings as
of November 1	6,000
Dividends declared July 1
not paid as of November 1	1,500

What is the amount of Ed’s gross estate?

$496,500

$1,290,500

$1,296,500

$1,298,000

34. Mr. Good died on April 15 of the current year. His assets and their fair market value at the time of his death were

Cash	$ 10,000
Home	140,000
Life insurance payable to Mr. Good’s estate	200,000
Series EE bonds	90,000
Municipal bonds	180,000

Mr. Good had borrowed $10,000 against the cash value of his life insurance policy. Mr. Good’s estate is liable for the loan. What is the total amount of Mr. Good’s gross estate for federal estate tax purposes?

$240,000

$420,000

$610,000

$620,000

35. Which of the following amounts paid may be claimed as a credit on the estate tax return?

Charitable contributions.

Generation-skipping transfer tax.

State death taxes paid.

None of the answers are correct.

36. What amount of a decedent’s taxable estate is effectively tax-free if the maximum applicable credit amount is taken?

$19,000

$5,541,800

$13,990,000

37. Which of the following statements is true regarding allowable deductions on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?

Penalties incurred as the result of a federal estate tax deficiency are deductible administrative expenses.

Attorney fees paid incidental to litigation incurred by the beneficiaries are a deductible administrative expense.

Executor’s commissions may be deducted if they have actually been paid or if it is expected that they will be paid.

Funeral expenses are not an allowable expense.

38. Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, was filed for the estate of John Doe. The gross estate tax was $250,000. Which of the following items cannot be credited against the gross estate tax to determine the net estate tax payable?

Credit for marital deduction.

Credit for gift taxes (gift made pre-1977).

Credit for foreign death taxes.

Credit for tax on prior transfers.

39. All of the following items can be claimed as deductions against a decedent’s estate EXCEPT

Specific bequest to son.

Executor’s fees.

Legal fees to settle estate.

Charitable bequests.

40. Which of the following tax credits are allowed on an estate tax return (Form 706)?

Credit for foreign death taxes.

Credit for federal gift taxes (pre-1977).

Credit for tax on prior transfers.

All of the answers are correct.

41. Which of the following items is NOT an allowable deduction on a decedent’s estate tax return?

Bequest to a surviving ex-spouse.

Property taxes accrued before death but not paid until after death.

Executor’s fees for administering the estate.

None of the items is allowed as a deduction against the decedent’s estate.

42. Mr. Rich died in the current year. The following expenses and credit relate to the estate:

Administrative expenses	$ 12,500
Funeral expenses	8,500
State inheritance tax	33,000
Applicable credit amount	5,541,800

What amount can the executrix of Mr. Rich’s estate deduct from the gross estate in figuring the taxable estate?

$21,000

$54,000

$5,562,800

$5,541,800

43. Following the death of her husband, the executrix of his estate paid the following:

Medical expenses of the decedent, paid within 6 months of the date of death and not claimed on the decedent’s final income tax return
Funeral expenses of her husband
State inheritance taxes
Qualified charitable contributions, as a bequest dictated by the will of her husband

Which of the preceding generally are allowable deductions in determining the taxable estate on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?

1 and 3.

1, 2, and 4.

2 and 3.

All of the expenses are allowable.

44. B died in the current year. The state of residence was not a community property state. From the items listed below, what are the allowable deductions from the gross estate?

Funeral expenses	$ 3,500
Executor and administrative fees	5,000
Mortgage on jointly held property, one-half purchase price paid by B	70,000
Transfers of cash to B’s spouse	60,000
Expense of filing estate’s income tax return	500

$68,500

$73,500

$103,500

$135,000

45. Based on the following information, what is the total allowable deduction against the decedent’s estate?

$10,000 in mortgages and notes (receivable)
$5,000 in income in respect of a decedent
$12,000 in funeral expenses
$20,000 in attorney fees

$47,000

$32,000

$42,000

$10,000

46. Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, was filed for John Doe in 2025. His gross estate tax was $25 million. Which group of credits is allowable in computing his net estate tax?

Applicable credit amount and marital deduction credit.

Credit for foreign death taxes and credit for taxes paid on prior transfers.

Credit for funeral expenses and credit for charitable contributions.

Credit for gift taxes and credit for casualty and theft losses.

47. Charlie Jones is preparing Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, for his brother John, who died June 30, 2025. Charlie has identified gross estate items totaling $24 million. Considering the following potential deductions and other information, what will be John’s taxable estate?

Funeral expenses paid out of the estate	$ 10,000
Value of the residence owned jointly with John’s spouse that will pass to the spouse (this property is included in the gross estate)	240,000
Mortgage on residence	20,000
Value of property given to charitable organizations per John’s will	50,000

$23,730,000

$23,740,000

$23,720,000

$23,700,000

48. Which of the following is NOT an allowable deduction against a decedent’s gross estate?

Administration and funeral expenses.

Claims against the estate.

Penalty incurred as the result of a late payment of the federal estate tax.

Casualty and theft losses.

49. Ordinary and necessary administration expenses paid by the fiduciary of an estate are deductible

Only on the fiduciary income tax return (Form 1041) and never on the federal estate tax return (Form 706).

Only on the federal estate tax return and never on the fiduciary income tax return.

On the fiduciary income tax return only if the estate tax deduction is waived for these expenses.

On both the fiduciary income tax return and the estate tax return by adding a tax computed on the proportionate rates attributable to both returns.

50. Alan Curtis, a U.S. citizen, died on March 1 of the current year, leaving an adjusted gross estate with a fair market value of $1.4 million at the date of death. Under the terms of Alan’s will, $375,000 was bequeathed outright to his widow. The remainder of Alan’s estate was left to his mother. Alan made no taxable gifts during his lifetime. In computing the taxable estate, the executor of Alan’s estate should claim a marital deduction of

$250,000

$375,000

$700,000

$1,025,000

51. In general, which of the following items are allowable deductions against a decedent’s estate (Form 706)?

Funeral expenses.

Mortgages (decedent’s liability).

Charitable bequests.

All of the answers are correct.

52. All of the following would be allowed as deductions from the gross estate in computing the taxable estate EXCEPT

Funeral expenses paid out of the estate.

Debts owed by the decedent at the time of death.

Income tax on income received after the decedent’s death.

Casualty and theft losses that occurred during settlement of the estate.

53. Which of the following is NOT a credit against gross estate tax in determining net estate tax?

Foreign death taxes.

Qualified charitable contributions.

Unified credit (applicable credit amount).

Gift taxes on gifts included in the gross estate.

54. An executor paid the following on behalf of an estate: $3,500 for attorney’s fees, $1,000 for a burial lot, $5,000 of state estate tax, and a $750 credit card debt of the decedent. What amount can be deducted from the gross estate?

$3,500

$4,250

$5,250

$10,250

55. Chuck is preparing Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, for his client Jim, who died June 30, 2025. Chuck has identified gross estate items totaling $16,000,000. Considering the following potential deductions and other information, what will be Jim’s taxable estate?

Funeral costs paid out of the estate	$ 35,000
Value of the residence owned jointly with Jim’s spouse that will pass to the spouse (this property is included in the gross estate)	450,000
Mortgage on residence	100,000
Charitable donation of property per Jim’s will	75,000

$15,575,000

$15,640,000

$15,540,000

$15,615,000

56. Mike and Carol, a married couple, have two assets at the time of Mike’s death: a $10,000,000 life insurance policy owned by Mike naming Carol as the sole beneficiary, and $8,000,000 of real estate owned by the couple as joint tenants with right of survivorship. What is the amount of the marital deduction to Mike’s estate for these two assets?

$9,000,000

$10,000,000

$14,000,000

$18,000,000

57. Which of the following expenses may NOT be deducted on an estate tax return?

Marital transfers if the spouse is a nonresident alien.

Medical expenses paid within 1 year of death.

Administration and funeral expenses.

Expenses for selling property of an estate specifically to preserve the estate.

58. If a person died in 2025, an estate tax return must be filed if the value of the gross estate at the date of death was more than

$13,990,000

$13,610,000

$12,920,000

$12,060,000

59. On June 30, 2025, Rita died with a taxable estate of $14,630,000 and estate taxes payable of $256,000. Victor, the executor, filed the estate tax return on December 31, 2025. He distributed all the assets of the estate without paying the estate tax liability. Dustin (one of several beneficiaries) received $35,000. What are the possible tax assessments against Victor and/or Dustin?

Victor

$256,000

Dustin

Victor

$128,000

Dustin

$128,000

Victor

$256,000

Dustin

$35,000

Victor

$256,000

Dustin

$256,000

60. Anna died January 20, 2025. John, the executor, filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, on June 30, 2025. John paid the tax due and distributed the assets on September 30, 2025. The assets were properly valued at $14 million on the date of death. The alternate valuation method was not elected. Generally, what is the last day that estate tax may be assessed upon recipients of property?

September 30, 2028.

October 20, 2028.

June 30, 2029.

October 20, 2029.

61. Mr. Brown died on September 30, 2025. His gross estate was valued at $10,480,000. Unless an extension is granted, Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, must be filed on or before

April 15, 2026.

January 15, 2026.

June 30, 2026.

A United States Estate Tax Return does not have to be filed.

62. Unless an extension is received, Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, must be filed

By the 15th day of the 4th month following the month of death.

Within 9 months of the date of death.

Within 6 months of the date of death.

No later than the due date of the estate income tax return.

63. Mr. Alexis died April 30, 2025. His gross estate totaled $17.5 million. Assuming no extension is granted, the executor must file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, on or before (ignore weekends and holidays)

April 15, 2026.

August 15, 2025.

January 30, 2026.

October 31, 2026.

64. Charlie Jones died June 15, 2025. His taxable estate is $15 million. Assuming the estate chooses to have an estate tax apply, what date is Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, due?

Not due, because taxable estate is less than the exemption amount.

March 15, 2026.

April 15, 2026.

December 31, 2025.

65. Eileen, a U.S. citizen, died on December 17, Year 1. The value of her gross estate at the date of death was determined to be in excess of $13.99 million. Assuming the estate chooses to have an estate tax apply, without regard to extensions, what is the due date of Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?

December 31, Year 1.

February 28, Year 2.

April 15, Year 2.

September 17, Year 2.

66. Mr. Metro, a U.S. citizen, died on June 30, 2025. The value of his gross estate at the date of death was determined to be in excess of $13.99 million. Without regard to extensions, what is the due date of Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?

June 30, 2026.

December 31, 2025.

March 30, 2026.

March 30, 2027.

67. Which of the following rules does NOT apply to the filing of an estate tax return of a U.S. citizen?

Form 706 is the form that is used to file an estate tax return.

The return is due 9 months after the date of death unless an extension of time for filing has been granted.

The return is filed with the Kansas City, Missouri, Service Center.

For 2025, the value of the gross estate must be over $13.61 million.

68. The executor of an estate may request an extension of time to pay the estate tax. Which of the following statements is NOT true?

The usual extension of time to pay is up to 12 months.

When the executor applies for an extension, (s)he must show why the estate cannot pay the tax in full.

The IRS may extend the time for payment for up to 12 years.

A request for an extension of time to pay estate tax is filed on Form 4768.

69. An extension of time to pay the estate tax may be granted if the executor can show reasonable cause as to why the estate is unable to pay the tax in a timely manner. Which of the following statements is NOT an illustration of reasonable cause?

Since the estate includes a claim to substantial assets in a pending lawsuit, the gross estate cannot be determined when the tax is due.

The liquid assets of the estate are located in several jurisdictions and are not within the immediate control of the executor.

The estate would have to borrow funds at an interest rate higher than generally available to satisfy claims against the estate that are due and payable.

Payment of the estate taxes would require the liquidation of more than 50% of the assets of the estate.

70. Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is due to be filed (before extensions)

Six months after the date of death.

Nine months after the date of death.

Twelve months after the date of death.

By January 31 of the following year.

71. Kramer (age 63) established a trust and named his second wife, Theresa (age 50), as income beneficiary for 20 years. After 20 years, Kramer’s son Trevor (age 40) and nephew Bob (age 25) are to receive lifetime income interests. Trevor died 22 years after the trust was established, and Bob died 34 years after the trust was established. After the death of both Trevor and Bob, the remainder passes equally to Kramer’s granddaughter Sara (age 20) and great-granddaughter Hope (age 1). Assuming both Sara and Hope were alive when Bob died, how many times is the generation-skipping transfer tax levied?

Never.

Once.

Twice.

Three times.

72. Which of the following is a correct statement of the events that may trigger a generation-skipping transfer tax?

A taxable termination only.

A taxable distribution only.

A taxable termination or a taxable distribution but not a direct skip.

A taxable termination, a taxable distribution, or a direct skip.

73. Which of the following is NOT a characteristic of a skip person as it pertains to the GSTT tax?

A natural person.

A person only one generation below the generation of the donor.

A person two or more generations below the generation of the donor.

A donee of a gift.

74. Edwin gave his grandson Todd $30,000. Todd is 15 years old and lives with his parents. Which of the following statements regarding the generation-skipping transfer tax is true?

Because the gift is subject to the generation-skipping transfer tax, it is not subject to the regular gift tax.

The gift is subject to both the regular gift tax and the generation-skipping transfer tax.

The gift is not subject to the generation-skipping transfer tax because Todd’s parents are still alive.

If Edwin had transferred the funds into a trust solely for his grandson’s benefit, the gift would not be subject to the generation-skipping transfer tax.

75. The generation-skipping transfer tax is imposed

Instead of the gift tax.

Instead of the estate tax.

As a separate tax in addition to the gift and estate taxes.

On transfers of future interest to beneficiaries who are more than one generation above the donor’s generation.

76. Which of the following is a true statement about the taxable amount of a generation-skipping transfer?

The taxable amount for a direct skip and a taxable termination are the same.

The taxable amount for a taxable termination is the value of the property received by the transferee reduced by expenses incurred by the transferee in connection with the determination, collection, or refund of the GSTT.

The taxable amount for a taxable distribution is the value of all property distributed less allowable expenses, debt, and taxes.

If a generation-skipping transfer tax on a taxable distribution is paid by the generation-skipping trust, an amount equal to the taxes paid by the trust will be treated as a taxable distribution.

77. Pearl gave $13.99 million in securities to her granddaughter Ruby in 2025. Pearl, a widow, had never made any gift to Ruby prior to the 2025 transfer. Pearl allocated $1,399,000 of her GST exemption to this direct skip. What is the generation-skipping transfer tax amount, and who must pay it?

Tax

$5,036,400

Payor

Pearl

Tax

$5,036,400

Payor

Ruby

Tax

$5,596,000

Payor

Pearl

Tax

$5,596,000

Payor

Ruby

78. In 2015, Jim’s will established a trust for his son Kevin and his grandsons. In 2025, a taxable termination occurred when Kevin died, and trust assets were distributed to grandsons Mark and John. Jim’s executor allocated $1,500,000 of his exemption to the trust, which had a value of $6,500,000 at that time. When the taxable termination occurred in 2025, trust assets had a value of $9,000,000. State death taxes attributable to trust property were $500,000. What is the generation-skipping transfer tax due on the taxable termination?

$1,800,000

$1,950,000

$2,550,000

$2,700,000

79. Which of the following is subject to the generation-skipping transfer tax?

Margaret wrote her will in 1985 establishing a generation-skipping trust. Her will was unchanged when she died in November 1986.

Sam wrote his will in 1960 but amended it in 1985 to add a generation-skipping trust. Sam was mentally incompetent from January 1986 until his death in February 2025.

Carol wrote a will in May 1986 that established a generation-skipping trust. She made no changes in her will before her June 2025 death.

Carlisle established in 1983 a generation-skipping trust by gift for the benefit of her descendants. The irrevocable trust was unchanged and no corpus was added prior to her death in 2025.

80. Kramer (age 63) established a trust and named his second wife, Theresa (age 50), as income beneficiary for 20 years. After 20 years, Kramer’s son Trevor (age 40) and nephew Bob (age 25) are to receive lifetime income interests. After the death of both Trevor and Bob, the remainder passes equally to Kramer’s granddaughter Sara (age 20) and great-granddaughter Hope (age 1). How many younger generations are there in this trust arrangement?

81. Jane Life, age 55 years exactly, wants to provide for the financial security of her secretary, Sue, and other unrelated friends. She establishes a trust. Sue, age 65, will receive income from the trust for her life. On Sue’s death, Sam, another friend who is currently 51, will receive income for his lifetime. Upon his death, the remainder interest will be divided equally between Kevin (age 39) and Stan (age 43). How many times will this trust be subject to a GSTT?

None. No GSTT will be assessed.

One.

Two.

Three.

82. When Sam died, his property was placed in trust, with his son David and David’s daughter Carole eligible to receive principal and income at the trustee’s discretion. When the property was placed in trust, its value was $5 million, and the GST exemption was not allocated to this trust. Carole received a distribution of $8 million when the trust’s value totaled $10 million. The appraisal to value trust assets cost $40,000 and was paid by the trust. What is the taxable amount of the generation-skipping transfer, and who is responsible for the tax payment?

Taxable Amount

$7,960,000

Taxpayer

Trust

Taxable Amount

$5,040,000

Taxpayer

David

Taxable Amount

$7,960,000

Taxpayer

Carole

Taxable Amount

$8,000,000

Taxpayer

David

83. In 2025, which of the following statements about the generation-skipping transfer exemption is false?

An individual (or his or her executor) can allocate a $13.99 million exemption to property with respect to which (s)he is the transferor.

All appreciation that occurs to property covered by the allocation of the $13.99 million exemption is also covered by the exemption up to a limit of $8 million.

If a married couple elects gift-splitting for a transfer, the transferred property may be allocated a GSTT exemption of up to $27.98 million.

The GST exemption may be allocated to an inter vivos transfer on a timely filed gift tax return or later statement of allocation filed with the IRS.

84. In 2015, Jim’s will established a trust for his son Kevin and his grandsons. In 2025, a taxable termination occurred when Kevin died, and trust assets were distributed to grandsons Mark and John. Jim’s executor allocated $1,500,000 of his exemption to the trust in 2015, which had a value of $6,500,000 at that time. When the taxable termination occurred in 2025, the trust assets’ value increased to $12,500,000. State death taxes attributable to trust property were $500,000. What is the inclusion ratio used to calculate the GSTT?

1/8

1/4

3/4

7/8

85. A trust is created by a parent for a child. The trust allows for distributions to the grandchild during the child’s lifetime. A taxable distribution occurs when a distribution is made from the trust to the grandchild. What type of tax is applied to this distribution?

Generation-skipping transfer tax.

Generation-skipping termination tax.

Generation-skipping distribution tax.

Direct skip gift tax.

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